Russian Economy General News: #8

kvs wrote:

What is happening is that the so-called developing world now accounts for over 50% of global GDP and is quickly moving to 70%.
(In fact, the GDP figures for the USA and its vassals are inflated since they have offshored their industrial production).   In the
1970s the so-called west (mostly NATO) accounted for 70% of the world's GDP.    The west is in a panic since it is losing its
economic dominance which it has had for centuries.   We are living in truly historic times.    The west targets Russia because
Russia can design anything the west can, but cheaper and often better.   So there is a natural tendency for Russia to have
an economic leadership position with most of the world.    Western elites are trying to make an example out of Russia by sabotaging
its economy and terrorizing the rest of the world into conformity.  
.

miketheterrible wrote:People are calling out the US bluff. Actually, funny enough, US increased its import of Russian products this year.

Turkey told US to go to hell, so has India (since it is now investing in Russia and Crimea) China doesn't recognize the sanctions and drastically increased investments in Russia,  Saudi Arabia, UAE, Egypt, Iraq, etc all wanting further business deals with Russia. US allies like Japan and South Korea invested heavily in Russia at recent deals.

Its come to the point the US will eventually admit they lost influence and many countries are looking out for themselves. Only nations that will stick to US like glue are the retard blocs like Baltic nations.

Even Slovenia wants to increase Russian imports.

Sanctioning United Engine corporation will hurt US NASA Roscosmos agreements.

GunshipDemocracy wrote:

kvs wrote:

What is happening is that the so-called developing world now accounts for over 50% of global GDP and is quickly moving to 70%.
(In fact, the GDP figures for the USA and its vassals are inflated since they have offshored their industrial production).   In the
1970s the so-called west (mostly NATO) accounted for 70% of the world's GDP.    The west is in a panic since it is losing its
economic dominance which it has had for centuries.   We are living in truly historic times.    The west targets Russia because
Russia can design anything the west can, but cheaper and often better.   So there is a natural tendency for Russia to have
an economic leadership position with most of the world.    Western elites are trying to make an example out of Russia by sabotaging
its economy and terrorizing the rest of the world into conformity.  
.

In almost all if what you have written I can subscribe to. IMHO situation is a bit more complicated though. Russia's economy now grows because of internal demand and investments. In order to have sustainable growth in any consumer goods they say you need minimum 500 mln market.

This is one of the reasons why US is targeting also CLIENTS of Russian products. And yes, new economies are growing faster then US/EU. But there is still dependence on technologies dollar and markets.  Tell me which country wants to be in total isolation form banking or investments just ot buy anything form Russia?

This must be a strong political agenda. Chine is a super heavyweight and might  not be sanctioned but India? not to mention Latin America o small Asian/African countries...

miketheterrible wrote:People are calling out the US bluff. Actually, funny enough, US increased its import of Russian products this year.

Turkey told US to go to hell, so has India (since it is now investing in Russia and Crimea) China doesn't recognize the sanctions and drastically increased investments in Russia,  Saudi Arabia, UAE, Egypt, Iraq, etc all wanting further business deals with Russia. US allies like Japan and South Korea invested heavily in Russia at recent deals.

Its come to the point the US will eventually admit they lost influence and many countries are looking out for themselves. Only nations that will stick to US like glue are the retard blocs like Baltic nations.

Even Slovenia wants to increase Russian imports.

Sanctioning United Engine corporation will hurt US NASA Roscosmos agreements.

True but now push for sanctions will be only stronger. As long as other countries will gain a critical mass it wont be easy... I hope it wont stop Nordstream-2 or Turkish stream too. Nice flow of money to Russian budget allowing hi-tech investments.

But markets for hi tech goods will be closing on Us side. Now it reached level that none of sides can step down without loosing face. Either US will loose with bing band or Russia will have very much technology development problems. I fail to see other solutions.

Austin wrote:US might be stupid but the CB of Russia is equally Stupid to buy US T Bills which has increased purchase in October.

Only a foolish Central Bank in the world would buy T Bills from a Country that exteremly hostile to Russia worse has imposed strict sanction against it.

Why cant to buy more Euro Bond or IMF SDR or better Gold , Are they hell bent on commiting Sucide with Russian Peoplese Money ?

Austin wrote:US might be stupid but the CB of Russia is equally Stupid to buy US T Bills which has increased purchase in October.

Only a foolish Central Bank in the world would buy T Bills from a Country that exteremly hostile to Russia worse has imposed strict sanction against it.

Why cant to buy more Euro Bond or IMF SDR or better Gold , Are they hell bent on commiting Sucide with Russian Peoplese Money ?

miketheterrible wrote:...........

after 2018 elections, things will change. Putin can't go full dictator on the libs just yet.

miketheterrible wrote: after 2018 elections, things will change. Putin can't go full dictator on the libs just yet.

PapaDragon wrote:

miketheterrible wrote:...........

after 2018 elections, things will change. Putin can't go full dictator on the libs just yet.

That's not how you deal with liberals.

Putin should retire and help elect someone ''squeaky clean'' like Shoigu. He could do one term and then get someone younger (it's about continuity).

After Putin retires THEN they (Shoigu or guy/gal after him, no matter) should clamp down on liberals.

Austin wrote:US might be stupid but the CB of Russia is equally Stupid to buy US T Bills which has increased purchase in October.

Only a foolish Central Bank in the world would buy T Bills from a Country that exteremly hostile to Russia worse has imposed strict sanction against it.

Why cant to buy more Euro Bond or IMF SDR or better Gold , Are they hell bent on commiting Sucide with Russian Peoplese Money ?

Singular_Transform wrote:


And what to do with the Russian oil?

burn it?

GunshipDemocracy wrote:
yes but why? ... genuine liberals not necessarily are traitors or idiots. The pro Russian ones should also have thirr voice heard.  The question who is after Putin probably we'll learn after next elections durin his term.

They talked that it might be general Dyumin. Pozhyviom uvidim though

PapaDragon wrote:

GunshipDemocracy wrote:
yes but why? ... genuine liberals not necessarily are traitors or idiots. The pro Russian ones should also have thirr voice heard.  The question who is after Putin probably we'll learn after next elections durin his term.

They talked that it might be general Dyumin. Pozhyviom uvidim though

I know, I wasn't talking about genuine ones

GunshipDemocracy wrote:

Austin wrote:US might be stupid but the CB of Russia is equally Stupid to buy US T Bills which has increased purchase in October.

Only a foolish Central Bank in the world would buy T Bills from a Country that exteremly hostile to Russia worse has imposed strict sanction against it.

Why cant to buy more Euro Bond or IMF SDR or better Gold , Are they hell bent on commiting Sucide with Russian Peoplese Money ?

Or maybe there is a reason we do not see?

I see it this way: Russia's economy needs to pay back lots of  USD denominated debts yet. So you see the need for dollars right?

CBR has first focused on sealing outflow of money via rogue banks then started lowering dons key interest rate.

Now they have a half year to prepare economy for local cryptocurrency usage.

Not that  I like liberals but if they are doing something maybe it is good to try to understand motives. Anyway do you thing Nabiulina would do anything Uncle Vova doesn't want to?

Maybe afterwards there will be right time to sell gas or crude oil for Rubles/Yuans?

Russia can painlessly increase the national debt more than twice - up to 25% of GDP, thereby increasing budget expenditures for the three-year plan. This is stated in the conclusion of the Center for Macroeconomic Analysis and Forecasting (CAMAC) on the draft budget of 2018-2020, which was submitted to the State Duma. "Izvestia" got acquainted with the document.

According to the calculations of the center, the increase in state debt by 1% of GDP will give the budget almost a trillion additional revenues. These funds can be sent, for example, to public procurement. Experts with the possibility of a painless increase in public debt agree, they suggest that the government in this case clearly decide on the goals, because it is one thing to finance the real projects in this way, and the other is "to be engaged in rearranging the tiles."

The government has submitted to the State Duma a draft budget for 2018-2020. According to the document, the Ministry of Finance plans to attract 868 billion, 869 billion and 1.34 trillion rubles, respectively, on the domestic market.

At the same time, Russia has the opportunity to increase the national debt in the domestic market at a faster pace, according to the CMAAC. Now the Russian national debt is 10.6% of GDP, of which borrowing in the domestic market is 7.9%. Given the strong demand from investors, Russia can increase loans to 25% without significant consequences

"Increasing the volume of attracting, for example, by 1% of GDP per year would not only avoid a nominal reduction in budget expenditures, but also ensure their stability in real terms," ​​the center's conclusion to the draft budget emphasizes.



According to one of the authors of the document, Elena Penukhina, head of the budget research group of the Center for Strategic Research, CEMAC, an increase in the state debt for every 1% of GDP could bring an additional 900 billion rubles.

- The money received through borrowing, you can not spend on increasing pensions or salaries, because it is possible that the macroeconomic situation may worsen. These funds should be directed to one-time spending. For example, for purchases, - Elena Penukhina pointed out.

Traditionally, other expert communities also prepare their conclusions on the draft budget. For example, the Higher School of Economics, the Russian Academy of Science and the Plekhanov Russian Economic University. In his conclusion (Izvestia has it), in particular, it is said that the debt policy at the federal level is assessed as weighted and moderate.

The Ministry of Finance is now pursuing a moderately stringent budget policy to reduce the budget deficit. Conservative expectations for treasury revenues are associated with a cycle of low oil prices. Despite the fact that this year they did not fall below $ 47 per barrel, the draft budget is based on the fact that they will not exceed $ 42 in the next three years. As a result, the Ministry of Finance expects to receive in the next two years only 1 trillion rubles of additional revenues in comparison with what is now laid.

The press service of the Ministry of Finance told Izvestia that the current draft budget already assumes a significant amount of borrowing by historical standards - by 60% more than in 2015-2017 in nominal terms.

"We are quite sure about the possibility to place the volume of bonds put into the draft budget on the market," the department emphasized.

The press service added that the dynamics of the volume of borrowings starting from 2019 will be determined in accordance with the "budget rules".

Now there is no point in increasing spending, because it is still unknown what priorities will be in the next presidential cycle, says Alexander Deriugin, director of the Center for Regional Reform Studies of the Russian Academy of Science and Technology.

- The Ministry of Finance is currently pursuing a tough policy because we do not yet know what priorities the country will have after the elections. If we now accept a budget with a large deficit, and then there will be new presidential decrees on expenditures, then the Ministry of Finance will not have room for maneuver. The possibility to increase the debt is, but it is too early to try to increase it, - said Alexander Deryugin.

According to expert of the Economic Expert Group Alexandra Suslina, it is necessary to increase the efficiency of current expenditures, and not to plan new ones.

- To borrow, that once again to change a tile, there is no sense. Failure to increase government spending can actually impede economic growth, but a mere nominal increase will also not contribute to growth. In order to increase, it is necessary to increase the efficiency of current expenditures, "she said.

The first reading of the State Duma draft budget for the three-year plan is scheduled for October 27.

The increase in national debt is a normal process, typical for most developed countries. Russia today has one of the lowest levels of public debt. For example, in the US it exceeds the country's GDP. The low level of state debt allows Russia to maintain macroeconomic stability and remain solvent, which positively affects the influx of foreign investors.

Now the Russian national debt is 10.6% of GDP, of which borrowing in the domestic market is 7.9%. Given the strong demand from investors, Russia can increase loans to 25% without significant consequences

Austin wrote:

Now the Russian national debt is 10.6% of GDP, of which borrowing in the domestic market is 7.9%. Given the strong demand from investors, Russia can increase loans to 25% without significant consequences

The Debt figure was far better than expected its at 10.6 % of GDP and will rise to 11.5 % by 2020

Excellent.

While increasing to 25 % of GDP wont be any issue but that money should be invested in Right Project that gives good returns but the idea is good to boost the economy and growth rate.

25 % is penuts when people easily survive with 90 % of Debt in case of EU and more than 100 % in case of US and  250 % in case of Japan.

This is what I was suggesting too , Borrow more locally and invest in right projects that gives good returns something like Civil Aviation where for every $1 spent Russia earns $6 or Infra Projects inside the country

BEIJING, Nov 1 - RIA Novosti. Russian Prime Minister Dmitry Medvedev said that Russia and China will work on the creation of a special fund for financing innovative research.
"We will work out the issue of creating a special fund to finance innovative research," Medvedev said at a news conference following the Russian-Chinese talks.

РИА Новости https://ria.ru/economy/20171101/1507959769.html

Cyberspec wrote:

It can't be denied that the CBR has overall, done a pretty good job the past 2-3 years in difficult circumstances....the main criticism seems to be that they are way to conservative on interest rates and need to be more aggressive. But CBR's "inflation-phobia" (or is that just an excuse?) is deeply embeded

Maybe afterwards there will be right time to sell gas or crude oil for Rubles/Yuans?

Seems that time is coming sooner than we thought (Yuan for Gold)....if it's implemented in practice it will be the equivalent of an earthquake I think

kvs wrote:

miketheterrible wrote:https://sdelanounas.ru/blogs/99854/

Non-oil exports from Russia to China grew by 32 percent

The non-west economy is growing and diversifying.   There is a massive potential for trade between Russia and China.   These
two countries can completely overshadow the EU in the near term.   This is what has NATO's panties in a bunch.    

kvs wrote:

kvs wrote:

miketheterrible wrote:https://sdelanounas.ru/blogs/99854/

Non-oil exports from Russia to China grew by 32 percent

The non-west economy is growing and diversifying.   There is a massive potential for trade between Russia and China.   These
two countries can completely overshadow the EU in the near term.   This is what has NATO's panties in a bunch.    

China overshadows alone  EU for some time already

As of 2016 they both have almost the same PPP GDP.     China and Russia can increase their per capita GDP by 50-100% so
the combined PPP GDP would be over twice that of the EU.

Adviser to the President of the Russian Federation Sergey Glazyev estimated the losses of the Russian economy from the existing system of currency regulation at $ 100 billion per year. He said this to RNS.

"Almost 30% of transactions performed in the financial market are made in favor of non-residents, among which a significant part are our legal and natural persons who withdrew money from Russia. We receive an inequivalent exchange: cheap money without taxes is exported, and expensive money with obstacles comes back. On it, we lose annually about $ 100 billion a year. This is a purely colonial system of currency regulation, which is inherently ridiculous, "he said.

According to Glazyev, the Russian system of currency regulation needs substantial changes, under which the inflow of money to Russia will be less limited, while the outflow is only within certain areas.

"Look how it works in China. A similar system should be adopted in Russia. We need to avoid the dollarization of our money supply, work in the same way as our Chinese partners and most other countries work, that is, it is allowed to import money without restrictions with control, of course, certain, but it is limited to export only by those directions that are necessary for economic development, investment in export infrastructure, "he said.

"We have created a unique practice in the world when it is much more difficult to import money to Russia than to take it out. We actually do not have any restrictions for transfer abroad, if it is properly designed. But to import money into Russia is extremely difficult. At us the most part of the private capital necessary for reproduction of economy, is in off-shores. The policy of monetary authorities has already led to the fact that more than half of the non-state capital circulating in Russia has offshore jurisdiction, "Glazyev summed up.