Russian Economy General News: #11

Russia has transitioned from an importer of polymer goods to a producer. Thanks to the absurd economic distortions introduced
by Yeltsin's regime and a stupid tax policy that did not discount taxes on raw inputs, Russia was exporting raw inputs to the west
and then importing value added production. So Russia was feeding the west. Now Russia has not only dramatically reduced imports
of critical polymers (polypropylene and polyethylene) but has developed an export capacity.

In spite of all the problems, the key is that the vector of development is in the right direction. Stupid tax policies and economic
limitations in Russia are coming down. That has NATzO's panties in a bunch. They are seeing that the plan for Russia to
fall apart has totally failed and now they are scrambling to establish an new cold war of "containment". But this time around
they have to "contain" economic hyperpower China. China and Russia together can and will outweigh NATzO. The developing
world is also gaining more and more autonomy as their banana republic status fades and more wealth is generated internally.
This is a long term process, but a looming crisis for the imperialist collective known as NATzO. The good old days of colonial
rackets are coming to an end.

In a few month the Nazis in Kiev will stop the purchase of russian goods (or be forced to by their masters in Washington) and then they will blame Russia for a new "Holdomor".

Hole wrote:In a few month the Nazis in Kiev will stop the purchase of russian goods (or be forced to by their masters in Washington) and then they will blame Russia for a new "Holdomor".

Sadly you are right. Delusional people will concoct all sorts of BS rationalizations to justify their delusions. I recall reading a comment in a
mail to the editor in a Canadian newspaper where the writer claimed that Ukrainian villages were starving while Russian villages were well
fed during the Holodomor in Ukraine. This is pure concocted fiction and not even one of the BS "facts" spread by the Holodomor hoaxers.

In modern times the analogue of the above will be that Donetsk and Lugansk were well fed while the rest of Ukraine starved.

https://www.awaragroup.com/blog/russia-vs-america-real-income-comparison/

I don't think the above was posted, but apologies if it was.

We compared salaries between Chicago, Illinois and Moscow, Russia. (Tax rates vary between US states, but they are the same all over Russia, so we could have settled for any Russian city, but Moscow provides a particularly good comparison with Chicago.) We made the amazing finding that the Moscow average monthly salary equal to $1,600 (annual $19,200) gives the same purchasing power as a monthly salary of $6,000 in Chicago (annual $72,000). Meaning, you live in Moscow (at least) as well for $1,600 as you live in Chicago for $6,000.

Note that the average nominal dollar income in Russia was $800 per month in 2019.   So the Moscow average is only twice as high.
So that would mean that the effective mean income in Russia is $36,000 US dollars per year.   The mean personal income in the
USA is just over $50,000 per year.   Clearly Russia is not quite there yet, but it is not that much poorer.   Russia also isn't an
economically homogeneous country like the USA.   There are whole regions which have culturally determined characteristics
such as Siberia, where the aboriginals have republics and have not abandoned their way of life completely.   So they may have
low incomes, but are not paupers.

The article has a load of BS denier posts below it. The average Moscow City income was 100,000 rubles per month in 2018:

https://www.themoscowtimes.com/2019/04/10/half-of-russians-say-theyll-never-live-to-see-a-decent-salary-survey-a65173

But it was 3/5 of 2020 in 2013:

https://tradingeconomics.com/russia/wages

The ruble to dollar exchange in 2013 was about 32 to 1. It has been about over 70 to 1 in 2020. So the exchange rate
is a BS measure of wealth. People's standard of living in Moscow did not fall between 2013 and 2020 aside from recession
blips. Real (inflation adjusted) incomes have increased. In order to use the exchange rate, Moscow residents would need
to earn over 120,000 rubles per month in 2020 to be at the 2013 level. Accounting for the over 5% annual real income growth
the ruble amount should be 1.4 times higher or about 168,850 rubles.

The Awara group income numbers for Russia should be scaled:

$800 -> $1000
$1600 -> $2000

However, their analysis is still valid.

The above denier BS which tries to use exchange rates to judge the wealth or Russians brings up the following facts:

1) Regardless of Russia's export profile, it is one of the top countries in the world with the least amount of import dependence
on a wide spectrum of goods and services. Poland is one of those countries, but that is thanks to the fact that Germany
has opened up a whole slew of branch plants. Such investment is very marginal in Russia. By contrast, China has been built up
through the offshoring efforts of the rich world.

2) Russians earn rubles and not dollars. So a 50% exchange rate drop does not make them twice as poor. This is thanks to
the fact that a 50% exchange rate drop does not produce a 100% increase in prices. Russia has had an inflation under
6% for the last 7 years and that includes the early 2015 recession associated with the ruble forex drop shock.

The average western reporting on Russia utterly fails to account for such facts. This feeds the consumer lemmings
the BS delusion that Russia has been wreaked by sanctions and low oil prices.

Think of Russia as being like the west in the 50´s/60´s. Back then you could buy a house for 10.000 bucks (and most people could do it with their savings), for the same house you would pay 250.000$ today.

If the average russian would be so poor, Russians wouldn´t be the largest tourist group in Turkey, Egypt, Thailand and some other places.

Hole wrote:Think of Russia as being like the west in the 50´s/60´s. Back then you could buy a house for 10.000 bucks (and most people could do it with their savings), for the same house you would pay 250.000$ today.

If the average russian would be so poor, Russians wouldn´t be the largest tourist group in Turkey, Egypt, Thailand and some other places.

That's the thing, something that escapes most people. People on average believe that if the house costs $300,000 then it is clearly better quality and everything else than a house in Russia for $100,000. Which is outright false. Or cost of a vehicle, etc etc.

Yes, russians are one of the largest tourist groups. They also spend more money on vacation homes, something most Canadians can't spend. When my parents purchased a vacation home in British Columbia, I was shocked. A dacha not far outside of St.petersburg is about $5 - 10 thousand. It's cheap.

Russia is tearing up the double taxation treaty with Cyprus. It tried to negotiate a deal where tricks such as using dividends
to avoid taxes in Russia would be stopped but the Cyprus government did not yield on the current scheme which is very lucrative
for it.

The racket is to operate plants in Russia by owners registered as citizens of Cyprus. The current taxation treaty allows such
rackets to divert Russian revenues into offshore dividend transfers which are not taxed by Russia (and not by Cyprus either).
The days of such rackets are coming to an end.

Cyprus dug its own grave. All the Russian money parked there will flee since it is no longer an offshore tax heaven. Sure
some deposits will remain in Cyprus banks but the main money is in offshoring rackets.

If Cyprus wants to benefit from russian money it should leave the EU and join the EEU.

kvs wrote:Russia is tearing up the double taxation treaty with Cyprus.  

Great news....should've done this years ago

kvs wrote:The above denier BS which tries to use exchange rates to judge the wealth or Russians brings up the following facts:

1) Regardless of Russia's export profile, it is one of the top countries in the world with the least amount of import dependence
on a wide spectrum of goods and services.   Poland is one of those countries, but that is thanks to the fact that Germany
has opened up a whole slew of branch plants.   Such investment is very marginal in Russia.   By contrast, China has been built up
through the offshoring efforts of the rich world.

2) Russians earn rubles and not dollars.   So a 50% exchange rate drop does not make them twice as poor.   This is thanks to
the fact that a 50% exchange rate drop does not produce a 100% increase in prices.   Russia has had an inflation under
6% for the last 7 years and that includes the early 2015 recession associated with the ruble forex drop shock.  

The average western reporting on Russia utterly fails to account for such facts.   This feeds the consumer lemmings
the BS delusion that Russia has been wreaked by sanctions and low oil prices.  

Screw the lemmings, and we should be happy that these clowns are blind-siding themselves by refusing to acknowledge reality. Their endless and spiteful malfeasence against Russia (and now China) is doing what no amount of Russian/Chinese government domestic "propaganda" could do - convinvce the average man/woman in the street that the West hates them and cannot be trusted. Their arrogance and exceptionalism will result in them sitting still and indulging in counter-productive behaviour while Eurasia catches up and surpasses them in real terms. The look on their collective dumb bovine faces when the SHTF and the inevitable geopolitical-economic tectonic shift really gathers pace will be just... fucking.... PRICELESS! I look forward to the bloodbath on MSM talk shows when the fools turn on each other and demand to know "Who lost Russia ver 2.0?"

I also look forward to the post-crash period and being able to buy up worthless Weimar-republic USD by the kilo and using them as heating fuel or toilet paper. Maybe I will buy an American or two if i can figure out a worthwhile use for them...

Nice

Russia's international reserves grew by $ 9.1 billion over the week

Gold, baby!

Just read in Stalker that Surgutneftegaz has some 52 Bill. bucks on his accounts, just behind Zuckerbook. I would like to see a list of the money that all state-owned (Surgutneftegaz is "private") got on their accounts.

Viktor wrote:Nice  

Russia's international reserves grew by $ 9.1 billion over the week

Russia had around $100 billion in gold in its FX reserves. Gold has been on a tear. It is symptomatic of the beginning of US dollar weakness. The move from US Treasuries to gold was one of the smartest financial moves they made. If US rate go negative (as in Germany), gold will trade much higher as the cost of carry will become a positive.

Shocking treachery.   The monetarist hive at the Ministry of Finance is sabotaging Putin's decision to shut down offshore
rackets such as the ones using Cyprus.   They delayed the dividend siphon racket closure to the beginning of 2024.  

This is incredible.  In Canada the Prime Minister appoints the Minister of Finance and dictates the policy of the Ministry.
In Russia you have some sort of bizarre autonomy happening where a clique of liberast compradors follows their own
private agenda.  This includes privatizing government companies without any consultation with the President.
This is grotesque.

Time for a 1930s style purge of this hive.   This is treason, pure and simple.

kvs wrote:Time for a 1930s style purge of this hive.   This is treason, pure and simple.

Comprador filth.  Hang them all, and send their families the bill for the rope and burial.  

Evidence of corruption... I would say the FSB should be taking a very close look into this...

Stalin's killing of so many people was actually counterproductive. Just firing/demoting them would be enough.

Walther von Oldenburg wrote:Stalin's killing of so many people was actually counterproductive. Just firing/demoting them would be enough.

That only holds for average incompetents. Traitors have the death penalty in the USA.

How do you prove that people purged in 1930s USSR were traitors? They were the first Bolsheviks and the most dedicated and Stalin was one of them BTW. He got awau because he managed to climb to the top.

Walther von Oldenburg wrote:How do you prove that people purged in 1930s USSR were traitors? They were the first Bolsheviks and the most dedicated and Stalin was one of them BTW. He got awau because he managed to climb to the top.

You are engaging in sophistry and thus a troll.

Bugger off.

I was talking only about 1930s. You're right in regards to today's situation.

GarryB wrote:Evidence of corruption... I would say the FSB should be taking a very close look into this...

I believe there will be enough backlash from this that they (economics minister) will be forced to make the change quicker.

https://www.stalkerzone.org/russia-accelerates-the-sovereignisation-of-capital/

Take a look at this article.

Bilateral agreements have to be adjusted. Russian laws have to be changed. This is no easy task which is done over night if you don´t want any loopholes to remain.

For 30 years there was done nothing, another 4 years is not the end of the world.