Russian Economy General News: #12

Saw this and thought of kvs...

Our most central central bank in the world

Ploy number 22

Charles de Montesquieu also warned Louis XV that

"Financiers support the state in the same way that a rope supports a hanged man."

It did not help - forty years later, the collapse of royal finances became one of the main reasons for the French Revolution.

The Russian Central Bank also hardly heeds the warnings of one of the founders of liberalism - this is plusquamperfekt (difficult times long past). In vain ...

But what else can you demand from the office, for which for many years all the laws have been rewritten, which allowed (no, not to control its work) at least to keep an eye on the pulse.

For some time now, there are so many oddities in the legal acts that govern the work of the Bank of Russia that one can simply marvel at it. AND

"Branch of the American Fed"

- this is by no means said by us about the Russian Central Bank.

In our opinion, the most important of these oddities is

"The Bank of Russia is not entitled to provide loans to the Government of the Russian Federation to finance the federal budget deficit."

This is from Article 22 of the Federal Law "On the Central Bank of the Russian Federation", which dictates actions according to the principle: save yourself, who can. The pandemic only showed, like a litmus test, this dubious, to put it mildly, legal postulate.

After all, it was he who either forced or allowed to rotate combinations, such as buying Sberbank "from ourselves." Well, basically, to sit like a dog in the manger, on the multi-billion dollar reserves earned over the "fat" years.

However, why sit? Everything acquired, judging by all the reports of the Central Bank of the Russian Federation, works and is very good. By being invested in securities denominated in dollars and euros, or simply - in dollars and euros.

The Fed and the European Central Bank can print them to pay off the dire consequences of the coronavirus, as they please. Moscow doesn't mind. Yes, Beijing is slightly resisting, but where will it go without the American and European markets.

Buy not sell

The same Article 22 prohibits the Central Bank from buying government securities at their initial offering. An exception is made only for those cases when it is provided for by the Federal Law "On the Federal Budget". That is, during the privatization of something, or, conversely, during the nationalization.

The latter is practically not noted in the modern history of Russia, although something similar happened quite recently, when the development institutions were shaken up ( Nanoachievements of the empire of Anatoly Chubais. Failure at the expense of the state ).

And it suddenly became possible even in a fairly central press, as well as on the pages of "Military Review" to write about the features of Russian nanotechnology ( Optimization of optimizers).

But then there is more.

The Bank of Russia, this absolutely independent (it is not entirely clear from whom - from the executive or still from the legislative branch) institution cannot lend to the budgets of the constituent entities of the Russian Federation, local budgets, and even (oh, horror!) Off-budget funds.

To finance the coverage of budget deficits at any level - too. But it was only before the pandemic that it was possible to make ends meet both at the federal level and at the local level?

Now times are different - pandemic, quarantine, lockdown. All who can and who cannot are pouring empty trillions into crisis industries, but most of all - into people. Bubbles of euros and dollars have swollen due to the fact that there is simply nothing to provide them and no one.

But for most countries, whose economies are listed as more developed than Russia, living on credit and with deficit budgets is the norm. For Russia, this was the norm only in the era of reforms. Then we put all our efforts into making the budget surplus.

Even under the pension reform, almost for the sake of this, they drove themselves. And what - again, everything that is ours by definition, will we give to the enemy? Like dinner. Although, it seems, they did not even have time to have breakfast properly.

America is not a decree for us?

Our most central central bank in the world

Liberal economists who gave a free Central Bank insist that the American analogue of the Central Bank of the Russian Federation, the Federal Reserve System, also has no right to purchase US Treasury bonds. But this, if directly, but no one forbids investing in those securities that have already gone to the market.

For a long time the Federal Reserve System has been sucking “extra” treasury and mortgage securities from this market. And such clever people as in the Russian (and, incidentally, in the Chinese, and in the Indian, and practically in all) Central Banks, they were all bought out for themselves.

Keeping the Americans afloat. Since without the United States, it turns out, oh, how scary. At one point, the portfolio of Treasuries and mortgage bonds made up 95% of all the Fed's assets - in fact, a private shop hired by the US government many years ago in order to steer dollars.

In this sense, the Russian Central Bank is not formally so "independent". But it is invested exactly where it was written by our "independent" colleagues - in assets directly or indirectly controlled by a private company, the Federal Reserve System.

For the second decade now, the Bank of Russia's investments in assets that are de facto or de jure outside Russia have exceeded 60% of all its assets. And only a third of them account for loans and deposits within the country, as well as for precious metals. In other words, it can work domestically as well.

Time will tell nothing

The beginning of the year is the time for all sorts of reports. And we will find out how things are going with the reserves of the Central Bank of the Russian Federation, with the budget deficit, with the spending of the Reserve Fund and the National Welfare Fund. And also, let's hope, with the pension fund - that is, with the funds of the Pension Fund.

Experts know that with the unfolding of the war of sanctions, the Bank of Russia has become more active in the stock and foreign exchange markets. It is risky, but everything is better than just investing in foreign assets (“passive”).

However, at the same time, the Central Bank of the Russian Federation did not bother with extended lending to its main wards - commercial banks. Although, due to the pandemic, it would be very logical. There are a number of industries, and very high-tech ones, which are growing by leaps and bounds due to pandemic, quarantine and lockdowns.

And there is no doubt that banks also lend them. But basically they are not those whom our most central Bank of Russia in the world has long and stubbornly deduced among the most "chosen" ones.

Author: Alexey Podymov, Anatoly Ivanov, Doctor of Economics

Most nations national banks are like this as it was written by the IMF and World Bank.

I wonder when Russia will take back full control of its central bank?

miketheterrible wrote:Most nations national banks are like this as it was written by the IMF and World Bank.

I wonder when Russia will take back full control of its central bank?

I read an article back in 2016, which talked about the Russian banking system. It talked about how Russia should take control of the Russian central bank and author said said the pushback would be more than sanctions and war(this was when the Donbass was very active and sanctions were being introduced.)

Arrow wrote:Why do many people now say that the Russian economy is stagnating? Is it a slight increase in GDP? After all, GDP is just one of many measures. In Russia, there is now a lot of all kinds of investments, etc. Is it difficult to talk about economic stagnation in such a case?

Because it is stagnating.

Even RT is sounding the alarm of russia major decrease in the population ,even after absorving
a 2 millions of ukrainians refugees and absorvign another 2 millions of crimeans , russia population decreased in 2020.

Even RT report of the failure of Putin in promoting more birth rates in Russia. and this is largely connected with economy stagnation and jobs.

The importance given to the subject can be seen by the fact that in both 2019 and 2020, Russian President Vladimir Putin devoted significant sections of his annual speech to the Federal Assembly to policies designed to encourage Russians to have children. However, the fact that Putin felt obliged to return to the topic in 2020 was evidence that the steps outlined in 2019 had proven ineffective.

To date, his pro-natalist policies are not having any obvious impact – in fact, since they were introduced, fertility in Russia has actually declined.

In part, this is due to economic reasons, most notably the fact that Russian incomes have stagnated, or even fallen, in recent years. A few additional financial incentives from the state cannot compensate for the lack of money in people’s pockets in the first place.

https://www.rt.com/russia/514186-demographic-situation-worrying-moscow/

Russia today in early 2021 have half a million less people than in 2019  ,even with all the migration Russia received from secular and christians in syria war ,from armenia ,from ukraine ,from georgia ,from abkhazia . the cold reality is that russia young population if leaving Russia in mass ,specially women.  I see all the time their videos on youtube , with titles finally moved russia and i can't blame them , reason they leaving
is because bad economy ,decaying quality of life in russia , and because is much better in the west its weather and love more western culture ,than outdated russia culture. latin america and latin parts of europe are their top places to move.

While orthodox people are decreasing at a very accelerated rate in russia ,the muslim population is significantly increased.  While i will do if i was president of russia ,will seek to build in a couple of decades plan , a new kind of "soviet union" but this time democratic and free and joined by nations from south america . With Russian military bases there.  russia needs to expand otherwise will die if stay there in the asian continent.

Make no mistake losing half a million people in just 1 year ,this is the most accurate poll ,possible of how putin is losing popularity. when any family choose to move of its motherland and choose another country something that is a very huge risk .. is because that family don't feel their quality of life is going to improve anything soon with the current government ,which is putin who controls it. So this is very bad news and there is no way putin can reverse this.. it will get worse the more sanctions russia will get and no ammount of olympics medals will fix this. only a modern economy post industrial revolution /space business revolution could bring jobs back and society to return to russia .

No, Russia's birthrate is experiencing the effects of the disastrous 1990s under Yeltsin - that missing generation is now the women of child bearing age and there just aren't enough of them. Has nothing to do with Putin and his economics. It is the donut hole effect. Russia must institute an immigration policy allowing talented young immigrants from Western Europe, Canada, Australia, and the USA. They can be selected to make sure only suitable people get admitted. You would be surprised how much demand there would be given Russia's low tax rates and land. It is easier to boost a country's economy by allowing grown educated young adults to contribute immediately rather than wait 20 years for a new generation.

PhSt wrote:@Vann, so since Putin performed poorly in trying to maintain economic growth and increasing the population, would you agree that it is time for Putin to get kicked out and get REPLACED by someone like Navalny?

Replace diarrhea with the plague?

No, simply criticism is warranted where it's due

In the same manner I have no problem giving credit to the government where it's due as well.
Population growth stimulus measures had some effect. But what really needs to happen is a reduction of housing prices, mortgage rates and more availability of 3-4 bedroom flats in the city. You'll see more of an increase in birthrates from that from all the maternity capitals, prohibitions on gay parades, etc... put together.

calripson wrote:No, Russia's birthrate is experiencing the effects of the disastrous 1990s under Yeltsin - that missing generation is now the women of child bearing age and there just aren't enough of them. Has nothing to do with Putin and his economics. It is the donut hole effect. Russia must institute an immigration policy allowing talented young immigrants from Western Europe, Canada, Australia, and the USA. They can be selected to make sure only suitable people get admitted. You would be surprised how much demand there would be given Russia's low tax rates and land. It is easier to boost a country's economy by allowing grown educated young adults to contribute immediately rather than wait 20 years for a new generation.

That as well but the fertility rate is independent of the absolute numbers of babies born, or the number of immigrants.

The fertility rate has dropped a couple notches again in recent years.

Fertility rates are given for a range of woman's ages but the propensity to have a child is not uniform across the age range. Fertility rates are also inversely related to economic prosperity in advanced economies - the more education and wealth women have the less children they want. Fertility rates in America among white women are falling rather quickly. The most determinant factor for number of children is religion - the more religious the woman the more kids she tends to have.

Not directly related to Russia but still economic activity that may have a effect on Russia.





https://news.cgtn.com/news/2021-02-04/West-s-central-bank-balance-sheets-jump-by-250-China-s-forex-reserves-XBmXCNlsPe/index.html




https://www.globalresearch.ca/consequences-moving-from-industrial-financial-capitalism/5734665

PhSt wrote:@Vann, so since Putin performed poorly in trying to maintain economic growth and increasing the population, would you agree that it is time for Putin to get kicked out and get REPLACED by someone like Navalny?

-Putin is a heavily incompetent patriot . patriotic yes , want to do the right thing but don't know
how to do it ,because he don't understand how to fight the west ,seeking to destroy russia. so he is a bad president for being a massive ignorant.

-Nalvany is a heavily incompetent traitor , he knows what he is doing ,he is simply an opportunistic
waste of human  , and unfortunately hanging him in public ,will only make him more popular and help create more opposition. so they should arrest him for lifetime and zero visits of anyone , he could offer him in change of wikileaks julian assange however. That will expose the hypocrisy of the west.  

So both incompetent in their own ways ,still none less they are both dangerous for Russia.
People might argue that nalvany is more dangerous ,but i disagree , i don't think navalny have
ever a chance to take power. While putin is in power and his actions or inactions allows the west
to attack russia and get away with it ,without any consequences.

Putin is dangerous for being a massive ignorant of what he have been doing on his 20 years ,
while he did actually "saved Russia" by removing the traitors and enemies from power ,and
nationalizing those super important business ,for the nation security , like its energy industry
and full control of its defense industry and shutting down banks money laundering money. At the same time he developed the most laziest kind of economic model any amateur could have ever done.
Overwhelming majority of Russian economy , the russian budget each year is dominated by commodities style economy , that is energy ,mining  and food exports just like venezuela and african nations third world nations.

The problem with those economic models is...
1) That completely ignores how easy is for the west ,for nations seeking to destroy Russia , to sabotage that economy of russia ,when he rely in those things.  Putin in 2014 in economic forums told every billionaire the most laziest thing , go and invest in agriculture ,because the goverment will be buying most of the food domestically (after europe sanctions began over ukraine)
2)completely ignore that russia is facing war , so what putin is doing will be similar to get a job in construction building project , in the middle of a war zone , when enemy snipers are positioned in the building near it , firing not only at every door and window you build ,but also at you too.
If you see war going on , regardless of the country in the planet you are ,you need to stop the aggressor first ,you can't just ignore your enemies ,turn your back on those firing at you , that are openly calling for a reward for your head. on real practice life ,most civilians will call police first and seek safety first before going to that job. But in Russia case ,the police is a corrupt one ,that is the one firing at you at, the orders of a corrupt government/tyranny/system in place.

Means ,that Russia have no options left other than a) to dialogue with them ,influence them so they don't stop doing what they doing ,trying to destroy your business but also kill you.
or  b) to fight back. The problem is that putin in 20 years , he have failed to influence their enemies
to stop  (not surprisingly) because the west will not give up their system/empire ,that took them many decades to build. No neither putin have influenced the west so they stop with dialogue ,neither putin is fighting them .  So because dialogue is not possible , Russia needs to fight back , can't ignore the bullets aimed at them ,can't ignore US military nuking exercises on russian borders ,can't ignore US alliance with international terrorism ,arming terrorist to kill their military ,which they have done many times in syria and other places. Can't ignore US embassies ,NATO embassies being used as center of recruit of opposition , to destabilize Russia.  So if dialogue is impossible with imperial anglo west ,what's the point of those embassies in Russia in the first place?  to promote tourism?

So once people realize that Russia have no options left other than war. if Russia enemies declare war on Russia , russia need to defend itself and fight back ? don't you think? ignoring your enemies as putin is doing and being a broken record ,asking them for "good relations" only show extreme weakness , show that putin is afraid of a fight and will be allowing their enemies to bully russia every week ,dodging bullets ,allowing their enemies to firing missiles ,allowing enemies to freely organize near its borders with missiles aiming at russia.  The last time the west did that on russia ,was during the soviet union , that deployed missiles on turkey and naturally the soviets had a strong leadership responded with missiles in cuba. which they did not allowed ,what created the missile crisis .  see the difference?

Putin allows its enemies to continue attacking Russia ,allow them to slap his face and then later turn the other cheek for more slapping. this is retarded foreign policy and a very dangerous thing to do, because  by showing so much weakness ,what putin is telling its enemies ,is that they can continue
attacking russia non stop and get away with it ,so the west will increase step by step the level of their
agression to see how far they can go with weak president putin. and if we are to believe what the former russian intel officers are saying in youtube, that russia is facing a biowar, so called covid19..
then this is an agression as serious as serious can be..

imagine for a moment that is discovered ,that iran secretly smuggle biological bombs in US in the west ,to paralize and destroy the US economy and cause hundred of thousands of deaths.. how you think US and NATO will respond?  iran will be nuked to death and its government demanded incondictional surrender.. well guess what ? US attacked russia with bio weapons and putin offered air conditoners and face mask.

What putin is doing is a very dangerous game , its weakness encourage the west to increase every year ,more and more the level of agresion on russia. Putin thinks he can handle those games ,but this  
is non sense. .this is not an strategy that can be sustained ,but pure cowardice what he is doing.

So Russia needs to fight back.. because have no other choice. the west unfortunately declared war
on russia and all its allies and russia can't stay iddle ,inviting the american embassy to christmas parties as putin did ,when the west fired hundred of russian diplomats and invaded their embassies and stole that property. The west don't follow any international law and russia is supposed to play by the western created rules.

So Russia needs to fight back ,is as simple as that. now when people can accept that reality .
then we can move forward to the next question ,how russia will fight back?  i don't think starting
a nuclear war is a good idea , but there is actually something Russia can do and the most amazing thing of all ,is that can even avoid a war.. and what that is ?

That Russia fight back the western system with innovative and modern business.

If Putin had any brains to understand what he really did in those 20 years in power , he will have reversed the things he did very bad. that is the economic model of russia and instead of gas stations and olympics epenis contest ,and fighting in surpassing the west in bananas production and wheat records.. where putin needs to fight is in those business ,that influence more the anglo western world and their allies , those things that most society enjoy. This problem Russia face ,created by putin incompetence , needs to be seen as .. do this or die.  fight the western system with business or fight them in a nuclear war, because those are the only options possible ,that will happen if Putin's continue using weakness and politeness as away to try to influence the west ,to not punish Russia to much .   but he don't understand that the west is encouraged to be more hostile ,when they see weakness of putin . Putin also appears to be delaying this war as much as possible ,so for them to be "ready for that war ", but this is silly ,it will be like allowing hitler to capture all main europe ,capture britain ,capture america ,allow them to become incredibly strong and powerful ,and let enemies choose everything ,when and where and how the war will start , and allowing them to throw the first massive strike first.

Like i said , it doesn't serve anything putin to "Rescue" russia economy from the early 2000's economic crisis ,to let it later sink again ,as the west already did with russia ,versus russian empire ,versus soviet union and now attempting to do versus russia federation.  The west is using their embassies and their social media as center of recruitment of opposition and also of islamic terrorism.
And putin just allow this ,because he is so lame ,that did not developed an independence from the western business world  yet.  The only nation in the world ,that is fighting back the western world is china , with an alternative system , alternative banking world , alternative high tech industry ,alternative internet too , alternative semiconductor industry , and so and so.. china is aiming at total
independence from the west and becoming an alternative to the western anglo world , and they are doing that wihout firing a bullet ,just building a very modern and advance economy ,that directly fight
and competes with the western one. This is very important ,because no empire can exist today in the world without business influence.

So is the so called "soft power" ,what putin have completely forgotten , he completely misunderstand the west , he don't understand his own young generations , while putin try to promote the great old past , in russia  with a backward looking culture ,and business model , the west is all the time innovating with modern business that becomes global and win the hearts of the world.

putin need to stop ignoring the west and use china as an example ,the things they doing right in business ,to also join them ,and challenge the western system ,not with politeness and with discourses of right or wrong but with leadership in advance business ,that counters the most popular business the west have.  this will create a new system and new culture with short time , and modernize russia  and develop a major influence on its own society , this is what kills oppositions ,and unite population ,when they see their country and its business are much better than western ones and a lot of jobs for them are created.  Also putin needs to stop trusting in jews  and muslims for high positions , they have been 5th column of russia since russia exist. even during the rurik dynasty ,they were a 5th opposition..all the revolutions that russia ever faced were done either by jews or muslims,  Interesting facts that you will not read in any russian school book or media for fear of promoting ethnic divisons, catherine the great even warned about them ,and not allowed ethnic minorities ,specially jews ,to live in moscow for fear of organizing to overthrow the government. they neither were allowed to get high level education at school    something that will be not good today to do ,neither necessary to go that far ,even more interesting fact. it was jews who killed not one but two russian tzars, and the anglo powers recruited them in both times ,their embassies in Russia were used as centers of organizing civil unrest in russia and today is not different ,they now recruited nalvany and its minions . Today the 5th column in russia are called "liberals" but they are jews. and this topic is banned from russia ,for fear of creating an open religious war , which is happening anyways but in secret. and the atheist west ,is fully aware of this divisions in russia and take advantage of it , seek to exploit them even more.

Gold is a commodity like any other. No need to exclude it.

A Russian think tank view

World Economy: Results of 2020 and Prospects for 2021
The share of real production is of key importance, both in the internal economic structure of the state and in the international division of labor.

https://qn7veek3vy676ftip3x3nsvd5y--russtrat-ru.translate.goog/analytics/8-fevralya-2021-0010-2931

So American tourists spent about $155 billion US per year abroad while Russian tourists spent $35 billion US per year abroad. Not too
shabby for a country with a faked low forex rate. Without the BS devaluation by a factor of two following 2014, we would have
seen much more spending abroad, likely by a factor two. (Using the logic that the same amount of rubles is spent in either
case). If foreign tourism spending is a rough measure of the GDP, then the real size of the Russian GDP is about 50% that of the
USA. This is based on the idea that Russian tourism is not pathologically high relative to the USA.

Andrey Kruglov will leave the post of Deputy Minister of Finance

Another deputy minister will leave the Ministry of Finance - Andrei Kruglov will leave his post, two sources close to the Cabinet of Ministers told Izvestia. According to them, his resignation is required in order to accept a new deputy head of the department, who could be responsible for preparing the budget.

Previously, this issue was supervised by the first deputy head of the ministry, Tatyana Nesterenko, Izvestia reported on her departure in January. In addition to her, another deputy minister, Anton Drozdov, who headed the FIU before the Ministry of Finance, is also leaving the department. This resignation has already taken place officially - on February 3, Prime Minister Mikhail Mishustin signed the corresponding document.

Finance Minister Anton Siluanov now has 10 deputies (not counting Tatyana Nesterenko, who is still formally listed in the department) - this is the maximum number of deputies in the ministry that is allowed after the reform of public administration. It will not be possible to hire a new leader without dismissing one of the current ones.

One of Izvestia's interlocutors clarified that, most likely, a person not from the ministry will come to this position. Another source said that several candidates are being considered, in particular, one of the high-ranking government officials.

calripson wrote:No, Russia's birthrate is experiencing the effects of the disastrous 1990s under Yeltsin - that missing generation is now the women of child bearing age and there just aren't enough of them. Has nothing to do with Putin and his economics. It is the donut hole effect. Russia must institute an immigration policy allowing talented young immigrants from Western Europe, Canada, Australia, and the USA. They can be selected to make sure only suitable people get admitted. You would be surprised how much demand there would be given Russia's low tax rates and land. It is easier to boost a country's economy by allowing grown educated young adults to contribute immediately rather than wait 20 years for a new generation.

Russia's baby bust is over. Its numbers are around the EU average. Demographics are a red herring anyway.

Properly functioning economies have business and credit cycles. Just because Russia's GDP or employment is going nominally up or down, doesn't mean there is something wrong.

The opposite means there is something wrong. Like in the US where the economy is living on the same monetary cocaine high it got in 2008. Instead of having a proper credit cycle so that the system can purge some bad debts and restructure, they keep throwing monetary cocaine at it. It works for awhile. But the social and political costs are huge and they are undermining the US dollar. Shit is bad in the US and the USD hasn't even started falling yet. It will

calripson wrote:No, Russia's birthrate is experiencing the effects of the disastrous 1990s under Yeltsin - that missing generation is now the women of child bearing age and there just aren't enough of them.

What?!

Dude, it's not because there are not enough of them, it's because they aren't having enough kids.
Russia's Fertility rate is around 1.5~1.7, in order to have a stable population, you need a rate of 2.1 minimal.
This means that women in Russia still aren't having kids at the needed levels, because they are wasting their fertile years in Careers and other nonsense.
Unless Russia brings down the Hammer and put Women back in the kitchen, they are eventually F'ed.

Has nothing to do with Putin and his economics.

Actually it has a lot to do with economics, particularly welfare, so long as women can replace the Man with the State, they will not make babies, until it's too late and that's if they realize it's getting too late.

It is the donut hole effect. Russia must institute an immigration policy allowing talented young immigrants from Western Europe, Canada, Australia, and the USA. They can be selected to make sure only suitable people get admitted. You would be surprised how much demand there would be given Russia's low tax rates and land. It is easier to boost a country's economy by allowing grown educated young adults to contribute immediately rather than wait 20 years for a new generation.

Uhm .... all of those countries are going through the same thing, they have no surplus of talent to give to anyone, in fact they are trying to import immigrants too, and i don't think i need tell you how well that's going.

The only people with surplus are Patriarchal places like the Middle-east or poor places like Africa, where they are too poor to give Welfare to Women.

The West and Russia giving equality to Women may seem Morally right, but Moral righteousness and actual Effective methods, are more often then not mutually exclusive from one another.
And in this case, diametrically opposed to each other.