Russian Economy General News: #12

andalusia wrote:

caveat emptor wrote:@kvs
I've never even mentioned anything about foreign debt repayment or capital flight. It still exists, but not in the amounts it used to. Cancelling tax agreements with offshore tax havens should put a lid on it further. What i am talking about is excessive purchases of foreign currency by CBR and austerity budget. One of the original premises of crearing a sovereign debt was a way to manage ruble exchange rate. That's according to Kudrin, whose team created it.
This scheme depletes economy of liquidity and gives outsized strength to the government in running economy.
You're trying to conflate what i wrote to something else. Russia doesn't need to borrow. Government needs to start spending more and suspend or limit CBR purchases.

It is about time that Russia and China reduce their dependency on the US dollar; I don't understand why Russia continued to buy US treasury notes to finance their major enemy's military to threaten them:

https://www.unz.com/proberts/russia-and-china-should-go-their-own-way/

They don't buy anymore. When things were different, there were clear advantages for buying US gov paper, as it has very deep market, making it highly liquid.

By using its money as a weapon they are in effect weakening it because who wants to use something that can and might be used as a weapon against them?

Now they are using it against Russia and China, but how long are before they use it to win an arms deal in the middle east against your companies offering a superior product?

They are killing their own golden goose.

GarryB wrote:By using its money as a weapon they are in effect weakening it because who wants to use something that can and might be used as a weapon against them?

Now they are using it against Russia and China, but how long are before they use it to win an arms deal in the middle east against your companies offering a superior product?

They are killing their own golden goose.

I think Russia would benefit by issuing its currency interest free like Guernsey:

https://www.michaeljournal.org/articles/social-credit/item/guernsey-s-monetary-experiment




Russia should strong consider the Chicago Plan to replace the poisonous Neoliberal monetary policy:


https://goldsurvivalguide.co.nz/the-chicago-plan-the-final-assault-in-the-war-on-cash/

No matter how we see it, it really is a big blow up.

Economy mostly works on perception, and the same applies to monetary systems. To think one can just go way from the dominant financial system, and just start a new one, is ridiculous.

What Russia must do is do a step back (nothing to do with Ukraine invasion) , and try to go in the system again. Honestly i dont see any other way. They really gonna try to limp Russian economy for good.

Interesting times ahead.

Pacense wrote:No matter how we see it, it really is a big blow up.

Economy mostly works on perception, and the same applies to monetary systems. To think one can just go way from the dominant financial system, and just start a new one, is ridiculous.

What Russia must do is do a step back (nothing to do with Ukraine invasion) , and try to go in the system again. Honestly i dont see any other way. They really gonna try to limp Russian economy for good.

Interesting times ahead.

You aren't good at this.  Russias economy is net reliant on domestic consumption. Their exports is rather solid and won't be touched.

All this war did was bring in new people who talk a lot but don't understand

I'm sick of having to constantly repeat myself for new people who don't know how to read. I'll either let @KVS explain or you can go back through the thread and read it.

miketheterrible wrote:

Pacense wrote:No matter how we see it, it really is a big blow up.

Economy mostly works on perception, and the same applies to monetary systems. To think one can just go way from the dominant financial system, and just start a new one, is ridiculous.

What Russia must do is do a step back (nothing to do with Ukraine invasion) , and try to go in the system again. Honestly i dont see any other way. They really gonna try to limp Russian economy for good.

Interesting times ahead.

You aren't good at this.  Russias economy is net reliant on domestic consumption. Their exports is rather solid and won't be touched.

All this war did was bring in new people who talk a lot but don't understand

I'm sick of having to constantly repeat myself for new people who don't know how to read.  I'll either let @KVS explain or you can go back through the thread and read it.

Net reliant on domestic consumption, really!? The expected decrease in income for this year might surprass 5%, and you talking...what?

Its gonna be a hell of a bumpy road for Russian economy. Don't expect anything else.

Pacense wrote:No matter how we see it, it really is a big blow up.

Economy mostly works on perception, and the same applies to monetary systems. To think one can just go way from the dominant financial system, and just start a new one, is ridiculous.

What Russia must do is do a step back (nothing to do with Ukraine invasion) , and try to go in the system again. Honestly i dont see any other way. They really gonna try to limp Russian economy for good.

Interesting times ahead.

Worst proposal I have ever heard.
Russia has had its own system before. Should be easier now as there are other relatively developed countries more or less seeking a way out of US-dominated system.

Of course, the process should have been started long ago. Putin initiated it but there was no enough time, or the progress was too slow. Now it needs to be done one way or another as there're no other options.

Pacense wrote:They really gonna try to limp Russian economy for good.

Interesting times ahead.

I agree that they going to try to limp economy as hard as they can. That's what they planned long time ago. For good? I dont think so. This would assume Putin didn't consider chances before repelling Ukro-aggression on Donbas.  

So called leading economy is also based on perception... not on real numbers (look at all debt in the USA non payable ever) and what if next China returns Taiwan home?  sanctions against China and Russia?oh this going to be more interesting.  

Add Iran and what 25% of worlds population and biggest economy + major food and energy supplier is out? good lack with this.

interesting prospects for the USA dont you think?

Urluber wrote:
Worst proposal I have ever heard.
Russia has had its own system before. Should be easier now as there are other relatively developed countries more or less seeking a way out of US-dominated system.

Of course, the process should have been started long ago. Putin initiated it but there was no enough time, or the progress was too slow. Now it needs to be done one way or another as there're no other options.

One of blows to USD could be selling any goods (gas/oil) for Russian currency no USD. Can you imagine no one of biggest oil/gas exporters doesn't use USD...

GunshipDemocracy wrote:

Pacense wrote:They really gonna try to limp Russian economy for good.

Interesting times ahead.

I agree that they going to try to limp economy as hard as they can. That's what they planned long time ago. For good? I dont think so. This would assume Putin didn't consider chances before repelling Ukro-aggression on Donbas.  

So called leading economy is also based on perception... not on real numbers (look at all debt in the USA non payable ever) and what if next China returns Taiwan home?  sanctions against China and Russia?oh this going to be more interesting.  

Add Iran and what 25% of worlds population and biggest economy + major food and energy supplier is out? good lack with this.

interesting prospects for the USA dont you think?

Urluber wrote:
Worst proposal I have ever heard.
Russia has had its own system before. Should be easier now as there are other relatively developed countries more or less seeking a way out of US-dominated system.

Of course, the process should have been started long ago. Putin initiated it but there was no enough time, or the progress was too slow. Now it needs to be done one way or another as there're no other options.

One of blows to USD could be selling any goods (gas/oil) for Russian currency no USD. Can you imagine no one of biggest oil/gas exporters doesn't use USD...

IIRC a few years ago Russia forbidden settlements of energy contracts in USD. Next step would be raw materials.

Economy mostly works on perception, and the same applies to monetary systems. To think one can just go way from the dominant financial system, and just start a new one, is ridiculous.

When mostly fair it makes sense to use a shared international system, but when that system is abused by those that clearly control it for their own selfish reasons then that creates a need for alternative systems... which of course will start with the disadvantage of not being global, but as members switch to the different system then those that have any business with them will have to join to... how is Boeing going to buy Titanium parts for its aircraft and engines... where is the EU going to buy its gas... no other supplier can meet their volume demands so at least to start with they are going to have to sign up... the Russians wont give them things for free.

A company could easily set up a small company that trades on these new money services while they remain on SWIFT and shift money around that way... SWIFT can't stop countries or businesses from using other banking services... that would be absurd and rather self defeating if Germany had to leave SWIFT so it could continue to pay for gas.

, and try to go in the system again. Honestly i dont see any other way. They really gonna try to limp Russian economy for good.

The west is not open to Russia, Russia needs to look at alternatives like BRICSA and the SCO and other groupings that don't include the US or EU or UK.

It doesn't need to be as big or extensive as SWIFT... and if they control it then for every transaction they earn some money instead of western countries... a further bonus.

Net reliant on domestic consumption, really!? The expected decrease in income for this year might surprass 5%, and you talking...what?

Its gonna be a hell of a bumpy road for Russian economy. Don't expect anything else.

They are expanding production... their ammo factories will likely have a lot of work ahead of them, and exports are booming, food, energy, weapons, and they have a huge budget surplus thanks to the price of oil going up... this is a time of war and also world wide pandemic and they are adding to their rainy day stashes for resources and they have never had more gold reserves...

Lots of western countries are likely to pull out of joint ventures, but I am sure Asian companies can slot straight in to fill the gap, or they can probably manage a lot on their own... completing projects on their own means they get the most benefit from them... German companies started helping them with large digital training systems most HATO countries don't have, and they pulled out when Russia did something... can't remember what, but Russian companies stepped up and completed them and built some in each military district in Russia.

Of course, the process should have been started long ago. Putin initiated it but there was no enough time, or the progress was too slow. Now it needs to be done one way or another as there're no other options.

That is the thing, they were talking about not using the US dollar in international or domestic markets, but they never really did anything about that until the US started making threats and using their dollar as a weapon and very quickly they sold off all the US debt they were carrying and shifted to other currencies for trade.

Not easy, but they forced them... which is further evidence if any is needed that Russia wasn't anti US... you don't buy US debt if you expect them to fail and not be able to pay it back... but the US just ignored all that and treated them like the enemy long enough that now they have it.

IIRC a few years ago Russia forbidden settlements of energy contracts in USD. Next step would be raw materials.

No point in accepting a payment type you can't use...

Russian companies making rifle optics sell in Euros to international customers.

One thing that comes to mind would be forcing some fraction (lets say 5...10%) of every energy and raw materials contracts to be settled in rubles, in order to give some certain strength to it.

[EDIT]

This is similar of what China is doing to get rid of the USD and strength the CNY, albeit China doesn't really impose it. When they export they want to be paid in CNY but when importing they want to pay in USD.

I think you all are being too optimistic but ok.

We have to wait until tomorrrow to see how the exchange rate vs the USD and the EURO will be. A bank rush can also happen. And because we all know how the bank system works, that can unleah forces not seen before.

Theres a chance that technology cut includes Oracle and SAP systems. If so how can big companies work at all?

SWIFT preparing to disconnect Russia

https://www.rt.com/russia/550740-swift-preparing-disconnect-russia/

For people thinking this is not a big deal , they have not seen how putin threatened to shutdown
american and european embassies from russia. if they disconnect russia from swift..
like others have painfully explained , this is not a small little thing , economy works on perception,
on something called TRUST. If a country don't inspire trust , because of the massive sanctions of the west , then russia will not have any investors in their country , any more than north korea.. that is only the few allies russia have will trade.

Im actually on record ,saying this is a good thing.. and cancelling nord stream 2 too..
and cancelling russia from any olympics.. YES.. about time they did it.. for me this is very good news
because it will show ,how retarded was putin presidency for 22 years.. of developing russia economy and business as a totally dependent nation of the anglo system in the west.

Russia can't even build satellites , some of them ,because of sanctions of the west.

This sanctions , the more the better, is the best thing that could happen to russia.
because will force the imbecile in chief , to stop developing russia, as a dependent nation of the west
and fight for the first time , for Russia total independence.. build their own internet , build their own computers , without taiwan or anyone else help.. build their own food , Russia needs true independence , close of those embassies of NATO that are only used to desestabilize russia.
stop developing russia as if it was venezuela ,a gas station.. putin wanted russia to become the saudi arabia of asia.. Now putin knows his economic development plans was a catastrophic mistake ,he will be cut from all that..

the only way for russia to exist in the world , in such hostile environment , in a cold war they facing ,is by creating their own system , but one that challenge directly US most popular business in the world , so that nations stop following the western world and follows the Russian one.. and do this with china.. but to stay following the western banking world, western internet , western computers
,western entertainment , western advanced electronics and later complaining when their system ,is not fair with russia, is truly stupid. if the west is not fair . why bladimir putin don't create his own system then? mediocre outdated leaders without vision , will say it can't be done. hopefully that idiot resign and someone else with vision and leadership skills take his place.

Pacense wrote:I think you all are being too optimistic but ok.

We have to wait until tomorrrow to see how the exchange rate vs the USD and the EURO will be. A bank rush can also happen. And because we all know how the bank system works, that can unleah forces not seen before.

Theres a chance that technology cut includes Oracle and SAP systems. If so how can big companies work at all?

Software side will not be such a big problem and can be replaced much easier.
It's still very early days, so we will have to see how will things settle. Atm, russian oil contracts were trading at decent discount to Brent, which is opposed to what was happening last few years.
Talking about going to BRICS and other catchy stuff sounds nice, but takes decades to turn and always comes with the cost. Russian deep economic connections with EU are not made out of love, but because it made a lot of sense in terms of logistics and price realization and structure.
I think, on this issue more will be able to be said in a week or 10 days when things settle a bit.

One thing that i missed and that's very noteworthy is that CBR assets are frozen by EU. It is not clear what the amount is, but, if my memory serves me it was about 240bn euros. It remains to be seen what amount was on ECB accounts. It shows that Ru didn't expect that to happen. It can hurt in the future.

caveat emptor wrote:One thing that i missed and that's very noteworthy is that CBR assets are frozen by EU. It is not clear what the amount is, but, if my memory serves me it was about 240bn euros. It remains to be seen what amount was on ECB accounts. It shows that Ru didn't expect that to happen. It can hurt in the future.

That is still rather small amounts.

Russia can reel in all its foreign debt to the west and not pay it, which exceeds that 240bn Euros (over 600B).  This I am talking about is private debt.

That means Russia still has hundreds of billions (roughly 360B) in reserves still at home.

And we dont even know if those Euro's are sitting in Russia or where.

Russia will eventually sue them over it.  Once the dust settles.  At that point, EU will end up paying a lot more.  And they will still have to pay something for that oil and gas coming from Russia which is still flowing.  Or Russia may just turn the taps off soon and the Europeans will start to go hungry and get very cold.

https://www.rt.com/business/550598-russias-reserves-roil-money-markets/

The EU-tards are already admitting that Russia removed its exposure to CBR sanctions in 2021.

Gents, apparently there are bank runs happening in Russia.
What are the validity of these reports?

I think you all are being too optimistic but ok.

Optimism doesn't come in to this... it is the west that is demonising Putin without listening to what he says, the west has been sanctioning Russia since about 2008 if not before, this is not about open fair trade or competition, they are treating this like a war. Newly elected German politicians talking about speaking to Russia from a position of strength... that is not a discussion... that is a ransom demand...

Putin has been trying for 22 years to get respect from the west and a partnership going that will grow and develop both parties, but the west is not interested in Russia being an equal partner worthy of respect or any consideration for their fears and security concerns... made clear when the US and HATO rejected Russias proposals and red lines out of hand.

If talking is no longer possible their just might be only force left.

But obviously the country known for Stalingrad and the Siege of Leningrad is going to fold... it just needs one more super sanction and they will do as they are told.

The irony is the focus on Putin.... if he goes then everything will be fine... the problem is that from that political party that is the dominant and most popular party in Russia, he is probably the most pro west politician there... careful what you wish for... but even he has lost patience now.

Theres a chance that technology cut includes Oracle and SAP systems. If so how can big companies work at all?

Someone is always willing to bypass sanctions... EU food deliveries kept going for a while after Russia banned them... they got new labels saying they were from Asia or Africa or Central or South America... but border control started to notice and stopped it more and more till they stopped sending it... you get no money for confiscated food that ends up being destroyed...

For people thinking this is not a big deal , they have not seen how putin threatened to shutdown
american and european embassies from russia. if they disconnect russia from swift..
like others have painfully explained , this is not a small little thing , economy works on perception,

Closing Russia off from SWIFT is a very big thing for the west to do because they are basically saying we don't want to trade with you any more.

Without trade what other links or relations are of use? There is no military links and no political conversations they need to have, so closing down embassies is a natural response and that will essentially close Russia from the west.

Russians going to the EU for trade will not be able to get visas or permission to cross borders, but then whatever deals they were doing would likely be sanctioned too so there would be no point. They need to buy a world globe and look elsewhere for partners and trade and Russia will benefit more from that...

Im actually on record ,saying this is a good thing.. and cancelling nord stream 2 too..
and cancelling russia from any olympics.. YES.. about time they did it.. for me this is very good news
because it will show ,how retarded was putin presidency for 22 years.. of developing russia economy and business as a totally dependent nation of the anglo system in the west.

I am on record saying this is a good thing too... the west is broken and corrupts all they touch. Russia needs to realise the only future they would have with the west would be in line with the US at the top and the EU possibly next and then UK and Japan and South Korea and Australia, and probably a few other countries before Russia appears and everyone above them on that ladder will start all conversations with admonishing Russia for not being a democracy like the west demands a democracy to be etc etc.

If Russia wants to be told what to do and how to think and what their moral values have to be then their future is at the bottom rung of the western ladder, but they will still be called the second world and wont be respected at all... anything of value will be asset stripped and moved to the west.... western technology will of course leap forward in quite a few areas surprisingly... Zircon will be cancelled but the new US missile that looks exactly the same will be amazing...

Russian deep economic connections with EU are not made out of love, but because it made a lot of sense in terms of logistics and price realization and structure.

They are not love or charity... the EU made those connections because it was in their interests so when these links are severed then they are going to feel the pain too. The EU likely wont cut off gas supplies from Russia, but who is to say Russia wont.... liquefy it and ship it to where it is expensive and make a good profit by selling it below market price...

One thing that i missed and that's very noteworthy is that CBR assets are frozen by EU. It is not clear what the amount is, but, if my memory serves me it was about 240bn euros. It remains to be seen what amount was on ECB accounts. It shows that Ru didn't expect that to happen. It can hurt in the future.

Lots of western companies with assets in Russia that could be seized in response...

Gents, apparently there are bank runs happening in Russia.
What are the validity of these reports?

Source?

GarryB wrote:

IIRC a few years ago Russia forbidden settlements of energy contracts in USD. Next step would be raw materials.

No point in accepting a payment type you can't use...

Russian companies making rifle optics sell in Euros to international customers.

And when Euro will be forbade to trade with Russia then what? all your euros to be paid to you will be frozen? You have to start selling in your own currency.

GarryB wrote:

Gents, apparently there are bank runs happening in Russia.
What are the validity of these reports?

Source?

Zerohedge apparently.
https://www.zerohedge.com/markets/im-shock-russians-scramble-pull-money-atms-bank-runs-begin

These are not bank runs. These are people scrambling to get foreign cash before it becomes too expensive. Nobody is going to
withdraw their savings at a frelling bank machine. They would go to a teller.

The ruble exchange has collapsed to 108 to the dollar. People think it will collapse further. But this is not the 1990s or even the
2000s and you can't do your shopping using dollars in Russia. I have questions about who these people are. I doubt they are
people with plans to travel abroad. Seems like black market participants. I guess they expect to be buying their iPhones using
dollars under the table like the bad old days of the 1980s.