Russian Economy General News: #7

miketheterrible wrote:It is said to be increase in USD but what they don't say is that they purchase into US bonds which translates to USD reserves.  Doing so has returns.  Small ones though (2% maybe at best).  If there has been an increase, it isn't in simple of exchanging Rubles for US dollar but possible purchases in US debt of some sort.  Gold prices have fluctuated uncontrollably so there is a reason why the slowdown in purchases.  You may not be a fan of the decision of the CBR but you will have to deal with it because the CBR and the overall government has kept the country more stable in the years of massive sanctions and heavy attacks at Russia's financial institutions mixed with low commodity prices, vs than lets say 2008 time when GDP dropped a fair bit.  More in that one year than it was for the last couple of years.  So it is clearly due to someone doing their job properly.

As for the rest, Russia is increasing agreements of trade in respective currencies.  As you may have noticed with the news of China, India, Iran, etc all trading in each other currencies.  But that won't change things all of a sudden.

If the US could simply block the USD portion of Russia's FOREX, without repercussions, then they would have done it already to strong arm Russia.  They have not and for various facts already pointed out.  I would like them to demolish the USD as the trading currency by dumping it, as I like to see the world burn.  But it isn't going to really solve anything either.  Could make Russia even more vulnerable actually as US could see an opportunity to strike at Russia's FOREX that wont hurt itself, by going after the other currencies and the commodity market even more.

Austin wrote:1 trillion rouble is ~ $ 15.5 billion , 36.654 in M2  comes to  ~ $ 568.137 Billion.

Isnt that a huge money supply in Circulation ?  Could they be more without affecting inflation

franco wrote:

Austin wrote:1 trillion rouble is ~ $ 15.5 billion , 36.654 in M2  comes to  ~ $ 568.137 Billion.

Isnt that a huge money supply in Circulation ?  Could they be more without affecting inflation

Why do you compare to the US$? It is only appropriate to foreign transactions, not domestic transactions. Do you convert your rupee to US$ before heading to the store or bank?  

Austin wrote:

franco wrote:

Austin wrote:1 trillion rouble is ~ $ 15.5 billion , 36.654 in M2  comes to  ~ $ 568.137 Billion.

Isnt that a huge money supply in Circulation ?  Could they be more without affecting inflation

Why do you compare to the US$? It is only appropriate to foreign transactions, not domestic transactions. Do you convert your rupee to US$ before heading to the store or bank?  

Dollar value was jst for reference

Out of 83 trillion GDP , 35 trillion is money supply in circulation

franco wrote:

Austin wrote:

franco wrote:

Austin wrote:1 trillion rouble is ~ $ 15.5 billion , 36.654 in M2  comes to  ~ $ 568.137 Billion.

Isnt that a huge money supply in Circulation ?  Could they be more without affecting inflation

Why do you compare to the US$? It is only appropriate to foreign transactions, not domestic transactions. Do you convert your rupee to US$ before heading to the store or bank?  

Dollar value was jst for reference

Out of 83 trillion GDP , 35 trillion is money supply in circulation

Been a long time since I studied Economics. Here are the IMF figures for 2014. These figures do not include money held in banks. India was at 77.5% and Russia at 60.25%. There is no perfect ratio, depends on the economy and what the government is trying to do.

AlfaT8 wrote:kvs, sepheronx where you at?
9:00 to 21:20

Jim Rickards,the chief global strategist at West Shore Group, appeared on Bloomberg Markets to discuss the next financial crisis. Rickards said he sees next US downturn approaching a tipping point soon. However, the Federal Reserve’s response to restoring financial solvency will be much different because there’s no place left to go with monetary policy.

“The next time, they’re not going to print the money because they’re tapped out,” he states. “They’re going to lock down the system.” In a move Rickards refers to at the “bail in, lock down” plan, large sections of the financial sector will be deactivated to avoid bank runs and complete collapse. Rickards describes some of the more likely scenarios:

“Money market funds will suspend redemptions, bank ATMs can be reprogrammed to give you $300 per day for gas and groceries; they can selectively shut down the banks. We saw it in Greece. We saw it in Cyprus; we’re seeing it today in India. The banks are closing. They’re out of cash.”'

Austin wrote:1 trillion rouble is ~ $ 15.5 billion , 36.654 in M2  comes to  ~ $ 568.137 Billion.

Isnt that a huge money supply in Circulation ?  Could they be more without affecting inflation

Another detained as part of an intensified Russia's anti-corruption campaign began, the mayor of Pereslavl-Zalessky and the founder and Director General of OOO "Ntpharma" project of the state Corporation "RUSNANO", in which the latter has invested more than 1 billion, but production was never started. Experts do not exclude that this case could be a prelude to another, larger.

According to SK, the mayor of Pereslavl-Zalessky Denis Koshurnikov was detained in the city, and the founder of "Ntpharma" Rustam Ataullakhanov and CEO Eugene sultans in Moscow.


According to the investigation, the state Corporation "Rosnano" since 2010 invested in the company "Ntpharma", which was engaged in the production of medicines and vaccines, more than 1 billion rubles. It was assumed that production will start in September 2012, but it's not running to this day.
"The investigation in cooperation with Guebipk of the MIA of Russia and SEB FSB of Russia it is established that the work on the implementation of the project for many years was not carried out, and the funds were dissipated, – is spoken in the message of Investigatory Committee. – Simulating the execution of works, Ataullakhanov and sultans in 2011 acquired from Koshurnikovo owned by OOO "Protekt" the land is located on the territory of the National Park "Plescheevo lake." At the time of the transaction Koshurnikov was the head of the Pereslavl district and issued a building permit without written approval from the Ministry of natural resources... Ataullakhanov and sultans are suspected of embezzlement of entrusted property in especially large size (part 4 of article 160 of the criminal code), Koshurnikov – in excess of powers of office the head of the local authority causing grave consequences (paragraph "C" of part 3 of article 286 of the criminal code)".

Who is to blame?

"Of course, I do not have full information, but it seems to me that the mayor of Pereslavl-Zalessky Denis Koshurnikova is unlikely to put on a par with other defendants in the case – shared their vision of the situation with the newspaper the SIGHT public figure, journalist Maxim Kalashnikov. – Know him as an active, energetic man, who came out of business and raised the city, built a terrific educational and entertainment Park. I know that his character was difficult, and therefore relations with the Governor of the Yaroslavl region had not evolved".

In the case of theft from RUSNANO can be new players


Ally Anatoly Chubais have detained on the case of a multimillion embezzlement
Chubais explained the situation with Rosnano searches in the example of theft of fur coats
SK filed a case against the mayor of Pereslavl-Zalessky on the fact of embezzlement of money RUSNANO
The FSB has identified the theft of the allocated RUSNANO 227 million rubles
Ex-Deputy head of RUSNANO Malyshev was arrested in absentia
Key words: corruption, RUSNANO, the fight against corruption
At the same Maxim Kalashnikov believes that the responsibility for the situation "Ntpharma" to a greater extent should management of RUSNANO: "we Know that RUSNANO typically works on projects in partnership with commercial entities, the city is involved to a lesser degree. In the end, they could not take control of the project, which is led since 2012? And if in the case of "Ntpharma" it is hoped that the company still will begin to produce domestic products, in the case of, for example, with another project of RUSNANO – Novosibirsk "Litecom" (I know the situation because they participated in the elections in this region) is unconscionable. There on Chinese technology for our raw materials, our working hands, in fact, slave-like conditions, was to establish the production of lithium-ion batteries. Which later turned out to be unclaimed, and the company went bankrupt. And since it's not only the failure of the concern, I want to ask a reasonable question: "If so many of the past shots, where to hit?". Which in the end produces Rosnano, I would really like to see the products of their activities. For example, Apple can show smartphones, and what can they show?"
In turn, issued on the occasion of the press release the state Corporation "Rosnano" explained the situation "Ntpharma" that "in the course of the project our partners were having difficulty with the payment schedule, after which RUSNANO has put their investment".

"...The project was under threat of freezing. But last year, RUSNANO has managed to find new private investors interested in investments in "Ntpharma" and bought a 35.5 percent stake in the company. After it began to receive in the project, RUSNANO BOD also adopted a decision on continuation of funding proportional to its equity participation share. All actions, RUSNANO has had a thorough legal examination, verification of security. Strategic decisions were approved Board of Directors. Currently, construction is completed (though with a substantial backlog from the initial schedule), is the installation, testing and commissioning of equipment. The company is no doubt a huge social significance of the project and its successful future".

In turn, the head of RUSNANO Anatoly Chubais so commented the situation on his page in the network Facebook:

"For all who follow current events in RUSNANO: please distinguish between a situation where YOU stole a coat from a situation where they stole it FROM YOU!".

Who stole fur coats?


"Divided, of course, who was stolen and who stole it, need it, but I'm sure in this case it is necessary to check and leadership of RUSNANO, and personally Chubais, said in an interview with the newspaper LOOK Director of the Center for economic research Institute of globalization and social movements Vasily Koltashov. And I am sure that then they will reveal a sufficient number of cases where "honest Chubais stole the money" any other negligent mayors and entrepreneurs, when the investment projects have been overstated and is not paid off when the running direction was unclaimed by the market. And it's not that Russia is so bad country, where it is impossible to start production of new technologies, and that the project Rosnano was made originally too liberal, he was focused on the issue of shares, through which it was planned to achieve market capitalization. To invest in real production, as, for example, was the government project of Nokia in Finland, no one was going. So I guess we are still waiting for the loud process is Rosnano, and the sooner he starts, the better, because he was wasted and public money".
A similar vision of the situation with the newspaper OPINION shared doctor of economic Sciences, Professor of Department of international Finance MGIMO Valentin Katasonov:

"I think, unflattering results RUSNANO and the current case around the "Ntpharma" – things are interconnected. Despite the fact that Chubais has stated that are the standard checks that are carried out before, and we need to share, "who has stolen and who stole it." However, previous inspections had revealed evidence of theft and embezzlement, and the decisions of the management of the Corporation and has not been done."

Recall that under Russia's anti-corruption campaign were also detained, the Minister of economic development of Russia Alexei Ulyukayev, a former Vice-Governor of St. Petersburg Marat Hovhannisyanand Deputy head of the Kemerovo region and head of regional management SK.

kvs wrote:So the monetarist minister of the economy has been brought down.   It looks like the move against the 5th column monetarist faction
occupying Russian finance is starting.  

I hope they purge the Central Bank.   Time to set the interest rates at 5% (CPI-2%) as in the west.

Politician and businessman Anton Danilov-Danilyan — how will investors react to the resignation of the speaker and other measures aimed at combating corruption

Tuesday news space stirred news about the arrest of the Minister of economic development Alexei Ulyukayev. The next day, reports of searches in the office of RUSNANO. Such actions, even when they are absolutely justified when they themselves are within the law, focusing on law enforcement and scare investors.

But fearing a — one, two, three, and seeing in the future, what really is the improvement that it is not some kind of struggle with the dissent, that is, not some political factors, namely the aspects related to corruption, investors will sooner or later calm down. For example, investors are actively invested in the same China, despite the numerous and much more rigid actions of the authorities against officials, steeped in the relevant corruption. Here, in our case, it all depends on the system of incentives and kontrtitula.

The uncertainty that may arise in the minds of some investors in connection with such action, can be compensated by appropriate measures to improve the investment climate from the point of view of legislation, from the point of view of the termination of the constant changes, when several hundred laws adopted at each session, and a huge part of them initiated by government and not by the deputies themselves.

Investors will calm down when the monetary policy of the Central Bank will be aimed not at the contraction of demand, namely economic development; when our budget is not to cut the various measures associated with the development of economy, education, health care, and Vice versa — let it be a little scarce, but will support the same industry around the world are the drivers of growth.

All of these compensating, but consistent action will certainly inspire investors confidence.

Now the situation is characterized by the fact that it is absolutely lawful actions related to compliance with the law, on the one hand, not kompensiruet stimulating, supporting economic development actions on the other side. Even basic economic forecast and built into the draft budget does not actually involve any measures that would pop out of that very conservative and, I would say pessimistic baseline forecast.

In fact, those measures which are already inscribed in the baseline forecast and ensure the implementation of the baseline forecast.

Thus, in the aspect of ongoing action, the situation with the behavior of investors and entrepreneurs in General ambiguous. It all depends on the other hand — actually, on the activity of the economic block of the government and the Central Bank, which, unfortunately, rather close, "sakoulevas" and do, in fact, increased economic development.

The author is Chairman of the expert Council of the industry development Fund (EDF) and co-Chairman of "Business Russia"

MOSCOW: Russia's gold reserves posted a large monthly gain of 1.3 million troy ounces to 50.9 million ounces at the start of November, the central bank said on Friday.
From Oct. 1, the central bank tweaked its reserve rules so that gold held in unallocated bullion accounts at banks could be included in its reserves.
Russia has also been buying gold to try to diversify its reserves and make its economy more resilient to external pressure including sanctions.
The increase in Russia's gold holdings over October is the largest monthly increase for at least the past two years.
The central bank's website displays Russia's quarterly gold holdings, as opposed to monthly ones, up until the end of 2014. Russia had 45.5 million troy ounces of gold at the start of 2016, up from 38.8 million ounces a year earlier.

zg18 wrote:Russian CB purchased 40.4 metric tons of gold in October, bringing official total reserves to 1583.2 tons.

MOSCOW: Russia's gold reserves posted a large monthly gain of 1.3 million troy ounces to 50.9 million ounces at the start of November, the central bank said on Friday.
From Oct. 1, the central bank tweaked its reserve rules so that gold held in unallocated bullion accounts at banks could be included in its reserves.
Russia has also been buying gold to try to diversify its reserves and make its economy more resilient to external pressure including sanctions.
The increase in Russia's gold holdings over October is the largest monthly increase for at least the past two years.
The central bank's website displays Russia's quarterly gold holdings, as opposed to monthly ones, up until the end of 2014. Russia had 45.5 million troy ounces of gold at the start of 2016, up from 38.8 million ounces a year earlier.

http://www.brecorder.com/markets/commodities/europe/328655-russian-gold-reserves-post-large-monthly-gain-to-509mn-oz.html

This bolded part means CB gold accumulation in previous years was much higher than officially reported, real reserves could be anywhere between 2500-3500 tons. I don`t expect they will tell real numbers, for now.

AlfaT8 wrote:It's a bloody gold rush, is there gonna be some sort of economics collapse soon or something???