Russia and economic war by the west

GunshipDemocracy wrote:

Patrushev criticized the decision to place gold and foreign exchange reserves abroad

Patrushev: placement of gold reserves abroad weakens financial security

https://ria.ru/20220426/rezervy-1785593800.html

MOSCOW, April 26 - RIA Novosti. The decision to place Russia's gold and foreign exchange reserves abroad turned out to be unjustified from the point of view of the state's financial security, said Nikolai Patrushev, Secretary of the Security Council of the Russian Federation.
"This decision turned out to be unjustified from the point of view of the state's financial security," Patrushev said in an interview with Rossiyskaya Gazeta.
Another thing is that by doing so the West hits not only Russia , but also itself, he added.

Pity he had no say when it happend.  Even sending Nabiulina to Magadan vacations wont help. Another idea is might be - if you steal ours we nationalize yours?

I agree about physical gold, if it was really abroad. Foreign reserves, in Euro and USD they couldn't do anything about, as any payment in aforementioned currencies has to clear through native central bank clearing systems. Those deposits are, essentially, IOUs backed by FED and ECB. Once they are frozen, you can't do anything with them.

Russia's gold reserves are inside Russia. These critics are either idiots or malicious.

GunshipDemocracy wrote:

Patrushev criticized the decision to place gold and foreign exchange reserves abroad

Patrushev: placement of gold reserves abroad weakens financial security

https://ria.ru/20220426/rezervy-1785593800.html

MOSCOW, April 26 - RIA Novosti. The decision to place Russia's gold and foreign exchange reserves abroad turned out to be unjustified from the point of view of the state's financial security, said Nikolai Patrushev, Secretary of the Security Council of the Russian Federation.
"This decision turned out to be unjustified from the point of view of the state's financial security," Patrushev said in an interview with Rossiyskaya Gazeta.
Another thing is that by doing so the West hits not only Russia , but also itself, he added.

Pity he had no say when it happend.  Even sending Nabiulina to Magadan vacations wont help. Another idea is might be - if you steal ours we nationalize yours?

I am pretty sure I read some where recently that all the Gold held by Russian central bank is within Russian boundaries.

All gold is in Russia.
Only a small portion of a few kilograms or so are in the US, those are some left overs after Soviet Union trade with the US.
But that is an imaginary option only.
There is no gold in the US, so any country that kept its storage there, can easily declare the reserved adjusted
All this whining about "losing reserves" is a targeted plot made to spoil pussies minds in the first place.

He said gold AND foreign exchange reserves

The foreign exchange reserves, part of them, were kept abroad so it's a valid argument.

It does not matter when you keep your currency reserves.
Those stored on the accounts of RCB can be blocked same easily.
Makes no difference.
The only option would be keeping the physical paper money, but hardly believe it is even possible for that numbers.
And what then?

ALAMO wrote:It does not matter when you keep your currency reserves.
Those stored on the accounts of RCB can be blocked same easily.
Makes no difference.
The only option would be keeping the physical paper money, but hardly believe it is even possible for that numbers.
And what then?

Well then. It should have been converted to gold or yuan beforehand

You can't convert 300bln$ without making the market to collapse.
That alone makes it clear, that there was no devil's masterplan by Putin, to attack the Banderastan.
If there would be one in existence, they would REALLY convert that, in small batches.
There was something that triggered Russian reaction, and I am saying that from the beginning. Something we didn't know, and won't be.
Let it be the revealed plans of Ukro attack on republics and Crimea, and everything that would follow.
As I have told you before, we could have faced an opposite scenario : a NATO troops intervention in Ukraine, on the formal request of the recognized regime. With 10k NATO troops located along the whole Ukraine, Russia would have it's hands tied for good. And the republics would be doomed.

ALAMO wrote:It does not matter when you keep your currency reserves.
Those stored on the accounts of RCB can be blocked same easily.
Makes no difference.
The only option would be keeping the physical paper money, but hardly believe it is even possible for that numbers.
And what then?

The paper notes can be cancelled as well. The serial numbers are tracked.

kvs wrote:

ALAMO wrote:It does not matter when you keep your currency reserves.
Those stored on the accounts of RCB can be blocked same easily.
Makes no difference.
The only option would be keeping the physical paper money, but hardly believe it is even possible for that numbers.
And what then?

The paper notes can be cancelled as well.   The serial numbers are tracked.

Exactly. I don't think it is even possible to source $300bn in cash to begin with. Converting all that money to yuan and gold would take months, if not longer.

ALAMO wrote:It does not matter when you keep your currency reserves.
Those stored on the accounts of RCB can be blocked same easily.
Makes no difference.
The only option would be keeping the physical paper money, but hardly believe it is even possible for that numbers.
And what then?

Possible, yes. The HKD is USD[1] backed and any attempt to print HKD can just be done after the equivalent paper-USD is deposited in a specific place in HK.

[1] a lot of talks about switching to CNY but nothing happened yet.

ALAMO wrote:You can't convert 300bln$ without making the market to collapse.
That alone makes it clear, that there was no devil's masterplan by Putin, to attack the Banderastan.
If there would be one in existence, they would REALLY convert that, in small batches.
There was something that triggered Russian reaction, and I am saying that from the beginning. Something we didn't know, and won't be.
Let it be the revealed plans of Ukro attack on republics and Crimea, and everything that would follow.
As I have told you before, we could have faced an opposite scenario : a NATO troops intervention in Ukraine, on the formal request of the recognized regime. With 10k NATO troops located along the whole Ukraine, Russia would have it's hands tied for good. And the republics would be doomed.

$300 billion can easily be converted. $6.6 trillion in notational value trades in the FX market every day.

Not sure why everyone is so upset... it is Frozen.

If they seize it then there are plenty of foreign assets in Russia that Russia can seize in response to the same or slightly higher value.

Those western food companies that refused to ban Russia should be left untouched, but anything else is fair game... apple, McDonalds, KFC... everything take ownership and keep them operating so the workers keep their jobs and the local food suppliers can keep selling their produce and just start changing things over time to make them more Russian... if you do it right and make it affordable and not so unhealthy but make it appetising then you might be able to expand into the rest of the world with these new brands... and it protects Russia from sudden unemployment issues and food producers who supplied these fast food chains not having regular paying customers for the products... it is a win win.

And you can bet your arse those franchises were profitable... they were not there to help Russia in any way shape or form.

Plus I am sure there are probably a few foreign pricks they really don't like and this would be a good way to get them and kick them out of the country even if you can't prove anything because of their shady practises.

Al Capone was a gangster guilty of all sorts of criminal activity but all they could nail him on was tax evasion... most big crooks are like that... in this case they don't need to prove anything... seize assets and send him packing.

calripson wrote:

$300 billion can easily be converted. $6.6 trillion in notational value trades in the FX market every day.

Apples to oranges.
$6.6 trl is made of billion transactions that people do daily.
If you are paying using your own credit card in another country in another currency, it all goes via $ exchange, so you put your small brick to that.
Everyone does.
I trade daily as part of my standard business practice.
So do tens of millions of enterprises around the globe.
But none is trading $300 bln, and none is a central bank of 5th global economy.
When Soros was targeting the British pound, he placed short positions on about Ł10bln, considered one of the biggest of all the times.
He will be in both history and economic books because of that.
Want to multiply by 20?

The Kherson region has been included in the ruble zone since May 1.
https://riafan.ru/23154233-hersonskaya_oblast_ukraini_perehodit_v_rublevuyu_zonu_s_1_maya

The area of the region roughly corresponds to Belgium with a population of about a million people

Scorpius wrote:The Kherson region has been included in the ruble zone since May 1.
https://riafan.ru/23154233-hersonskaya_oblast_ukraini_perehodit_v_rublevuyu_zonu_s_1_maya

The area of the region roughly corresponds to Belgium with a population of about a million people

Step by step ...

Russia under sanctions has not enough money to restore and rebuild area of Ukraine that captured so far - infrastructure and settlements there are badly damaged, Mariupol for example is totally destroyed, it would need billions to restore it.

Beside real sanctions are yet to come and start to bite. Unfortunately as chances that war can be stopped are slimmer and slimmer each day we will see more economical disruption in general.

Russia position as energy supplier to EU is dead basically and has not any future, now it is just a question will death come quickly (will hurt much more west then Russia but Russia will also bleed) or slow (will hurt much more Russia and less west but west will also seriously bleed).

And Russian economy will shrink this year for sure, but no one knows how much 5-10 or 15% all those scenarios are possible.

"Money". To build houses. Yes I am sure Russia needs to import concrete, glass, and steel from Europe.
I just cannot understand the mind of you people sometimes.
As for the manpower and their "wages" there are a couple thousand of willing volunteers fresh out from ex-Ukraine Army and Azov stock who can be prodded to help.
They can pay them like the US pays its inmates. 10 rubles a day, and it is 30 rubles to make a phone call.

The Schrödinger euros

by Jorge Vilches for the Saker Blog

What ? Payment in Rubles ?? Unthinkable, don´t even mention the word say EU officials and authorities.

Instead, Europe has formally demanded to pay for Russian imports with Schrödinger euros as explained below.

So it´s high time for psychiatrists to step in as the livelihood of 800 million Europeans depends on whatever this incredible set of un-elected delusional EU leaders decide. Let´s get this straight folks: the EU does not want to pay in Rubles – or gold — because it is playing cutie by pretending to “pay” for Russian imports for free. Be it natural gas, or oil, or coal or whatever Russian, instead of really “paying” the EU pretends to pull a “print & deposit + freeze & hide” wise-up gimmick. To make it clear for any audience, the above would be the equivalent of you pretending to “pay” at the check-out counter of any store with a photo of a fully sealed box that you say contains “money” that you will keep hidden at your home – unopened — as long as you want

https://thesaker.is/the-schrodinger-euros/

People have no understanding how the economy works. Physical damage actually stimulates the GDP due
to reconstruction generated demand. The whole of NATzO keeps its GDP alive by endless borrowing but
Russia supposedly has no money. Apparently the magical technology of borrowing and taxation only exists
in the west.

Russia "needed" the money generated from exports to the EU to import things from the EU. Like aircraft, cars, aircraft parts, car parts, medicines, and (before 2014) food. Well they do not import food anymore since Russia made its own counter sanctions in 2014. No more EU fruits, vegetables, milk, butter, or cheese. No more US chicken or EU pork. The EU took care of killing the aircraft, cars, aircraft parts, car parts of the equation with their current sanctions. Which was most of the imports. So that leaves medicines. Well guess what, the EU is throttling deliveries of medicines to Russia, by blocking access to sea and truck transport and blocking SWIFT transfers. And 80% of the active ingredients for medicine used in Europe (i.e. the stuff which actually makes the medicine work) are made in India and China. The rest is inert filler material and a box. So why not just cut out the middlemen? Are you that attached to the name in the box? Seriously. The EU made themselves redundant. And they think Russia still NEEDS their money? To buy what with exactly? What little trade with the EU remains can probably be paid if Russia cut trade with the EU to 1/10th of current trade volumes. Russia is probably cashing in a load of Euros they can't use right now. What is the use of this monopoly funny money? Which the EU can freeze if Russia doesn't spend it, by sanctioning Gazprombank just like they did with the others? Screw them. Payment must be made up front, immediate conversion into rubles, the money immediately gets converted into other currencies and sent elsewhere for recycling, and all trade arrangements should be changed to be made with friendly nations.

Medicines will be bought from India and China. Not the EU. Cars, and car parts, will come from China. Machine tools and machine parts. Also China. Semiconductors? From the gray market, used electronics (most electronics in the world are sent to China and Vietnam for recycling), and other willing countries willing to fabricate chips for Russia. In the meantime Russia needs to work on redirecting all its exports East. Top priority to LNG export facilities, and rail links to the Far East, oil and gas pipelines to China, etc. Fund development of Russian industry to import substitute aircraft and cars and parts. Russia has all the raw materials. There is no good reason to import this stuff.

mr_hd wrote:Russia under sanctions has not enough money to restore and rebuild area of Ukraine that captured so far - infrastructure and settlements there are badly damaged, Mariupol for example is totally destroyed, it would need billions to restore it.

Beside real sanctions are yet to come and start to bite. Unfortunately as chances that war can be stopped are slimmer and slimmer each day we will see more economical disruption in general.

Russia position as energy supplier to EU is dead basically and has not any future, now it is just a question will death come quickly (will hurt much more west then Russia but Russia will also bleed) or slow (will hurt much more Russia and less west but west will also seriously bleed).

And Russian economy will shrink this year for sure, but no one knows how much 5-10 or 15% all those scenarios are possible.

As finance is my area of ​​expertise I will try to help you. GDP is the sum of a country's wealth produced in a given period, usually calculated per year. The drop in GDP will be due to economic activity and due to restrictions imposed on Russia. However, this does not mean that Russia is out of money. In addition to international reserves that continue to rise, Russia has the most important: fiscal surplus. In other words, your current account is positive (spends less than you collect). This is mainly due to the rise in commodities and the drop in imports, which help a lot in their ways: trade balance (difference between imports x exports) and the internal budget surplus (tax collection x regular state expenditures).

From what I have read, Russia continues with a positive balance in both situations, with the trade balance being positive at 58 billion dollars. Money will not be a problem. At least as long as Russia continues with these surpluses.

I have heard from various sources that fiat currency is soft unless it is backed by gold or more recently commodities such as oil.
(Gonzalo Lira just made this point on The Duran livestream). This is a very important point. The ruble should be treated as
being more solid than the US dollar. The US dollar rests on foreign oil. Russia's currency can rest on its own commodities that
are essential for the global economy (energy, minerals). Russia has finally started to act in the correct manner and to demand
rubles for its exports. The power of the US dollar depends on the US aggressive posture, Russia should yield no quarter.

The US will use its Navy to do piracy on the sea, just like they already did piracy in land, by stealing Russian money and property abroad.
They blocked Russia from using the three largest sea transport companies (in Europe or abroad), and they blocked Russian merchant ships from trade with their own ports. They will do the same thing they do to Venezuelan, Iranian, and North Korea ships, and start blocking and arresting Russian ships and ships with Russian cargo on the high seas. If they do this then Russia should respond. And the response should be asymmetric.

They think because they have more nuclear attack submarines and destroyers they are safe with this posture. Dangerous times I think.