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Post by JoyinMudville on Aug 14, 2023 20:55:25 GMT -5
So, wait... Are they doing this intentionally or not? If they are doing this intentionally they wouldn't be having emergency meetings to try and 'stabilize things' They’re meeting to raise interest rates, which should stabilize their currency. Read the Moscow Times article that I linked. (The Moscow Times is based in Europe and is anti-Putin) So, they're not devaluing their currency intentionally.
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Post by Ranger John on Aug 15, 2023 1:39:13 GMT -5
Just stop. NO COUNTRY intentionally devalues their currency by 40%. This is a disaster, not a strategy. If it was off by 5 or 10%, your theory would be worth discussion. Because, yes, there are competitive advantages in the international markets for being a little less expensive than everyone else. That's not what this is. 40% is a crisis. Let’s return to this thread a month or so from now after we have a clearer picture of how things are playing out. I think the interest rate hike will stabilize things for them. It’s too soon to draw any conclusions given that Russia blew away expectations for GDP growth between April and June. 4.9% GDP growth is a pretty strong indicator of their economic performance. GDP growth is much easier for a central banks and governments to just completely fabricate. Especially in a situation like Russia, which has grown increasingly economically isolated Currency valuation depends on the currency market. We know how much a ruble is worth because that's how much the Indians and Chinese and Europeans and Americans are willing to trade for it.
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Post by soulflower on Aug 15, 2023 6:22:14 GMT -5
They’re meeting to raise interest rates, which should stabilize their currency. Read the Moscow Times article that I linked. (The Moscow Times is based in Europe and is anti-Putin) So, they're not devaluing their currency intentionally. In the near-term Russia benefits from a weaker currency. More competitive exports (grain and oil) and more money to fund the war in Ukraine. Could it hurt their economy in the long-term? Absolutely. They raised interest rates today. We’ll see if it stabilizes their currency for a while.
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Post by pickle20 on Aug 15, 2023 6:34:48 GMT -5
I've never claimed to be an "expert". I've cited articles that quote experts who back my analysis but you and others have ignored the articles and videos that I've shared. That's fine but don't act as if I'm pulling stuff from my rear-end when I cite sources. I know I'm not an expert. Hence why I usually reference different sources. Almost everything I've posted on this topic comes from stuff I've read about Russia's economy or the global economy... Don't kid yourself. I'm doing the same thing and getting a similar reaction from you. You posted articles as did I. Why do you assume you are backing the "correct" experts? Oh my god I love you.
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Post by soulflower on Aug 15, 2023 6:50:15 GMT -5
I've never claimed to be an "expert". I've cited articles that quote experts who back my analysis but you and others have ignored the articles and videos that I've shared. That's fine but don't act as if I'm pulling stuff from my rear-end when I cite sources. I know I'm not an expert. Hence why I usually reference different sources. Almost everything I've posted on this topic comes from stuff I've read about Russia's economy or the global economy... Don't kid yourself. I'm doing the same thing and getting a similar reaction from you. You posted articles as did I. Why do you assume you are backing the "correct" experts? It’s too soon to know who is right. Maybe you missed my previous response to RJ about how we should maybe return to the thread a month or so from now? The problem with our 24 hour news culture is everyone wants instant gratification. Often times it’s better to wait and see how things play out over time. What we know is, the Ruble’s value has declined over the last few months. My basic point was, devaluing currency isn’t always a bad thing and I cited several sources that made that exact same point. Specifically in Russia’s case, there are short-term benefits for currency devaluation, which indicates that they MAY be intentionally trying to weaken their currency (as some countries do at times). But can we know that with absolute certainty? No.
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Post by Rael on Aug 15, 2023 7:33:25 GMT -5
Don't kid yourself. I'm doing the same thing and getting a similar reaction from you. You posted articles as did I. Why do you assume you are backing the "correct" experts? It’s too soon to know who is right. Maybe you missed my previous response to RJ about how we should maybe return to the thread a month or so from now? The problem with our 24 hour news culture is everyone wants instant gratification. Often times it’s better to wait and see how things play out over time. What we know is, the Ruble’s value has declined over the last few months. My basic point was, devaluing currency isn’t always a bad thing and I cited several sources that made that exact same point. Specifically in Russia’s case, there are short-term benefits for currency devaluation, which indicates that they MAY be intentionally trying to weaken their currency (as some countries do at times). But can we know that with absolute certainty? No. I understand your basic point but as you said it isn't always a bad thing. So even in your argument you suggest there are times when it is bad. I pointed out experts who thought this has tipped over into bad. You are once again arguing in a fashion that declares that if someone doesn't agree with you it is because they don't have your knowledge, information, or insight. Perhaps we do and simply think you have drawn the wrong conclusions. It is a very Trumpian argument to believe those that agree with you are by definition correct and those that disagree are by definition wrong.
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Post by JoyinMudville on Aug 15, 2023 7:42:56 GMT -5
Don't kid yourself. I'm doing the same thing and getting a similar reaction from you. You posted articles as did I. Why do you assume you are backing the "correct" experts? It’s too soon to know who is right. Maybe you missed my previous response to RJ about how we should maybe return to the thread a month or so from now? The problem with our 24 hour news culture is everyone wants instant gratification. Often times it’s better to wait and see how things play out over time. What we know is, the Ruble’s value has declined over the last few months. My basic point was, devaluing currency isn’t always a bad thing and I cited several sources that made that exact same point. Specifically in Russia’s case, there are short-term benefits for currency devaluation, which indicates that they MAY be intentionally trying to weaken their currency (as some countries do at times). But can we know that with absolute certainty? No. No, the problem is that you're trying to have it whichever way doesn't make Russia look bad. If Russia was intentionally devaluing its currency as part of some grand master strategy (your claim) their central bank wouldn't be holding emergency meetings to raise interest rates to stabilize their currency (also your claim). The actual truth is that if a Russian person has had 10,000 rubles in the bank since January, he has less 26% less purchasing power today than he did in January because, with January as a baseline and a 26% decline in the value of the ruble, he's basically lost 2,600 rubles. Now add in inflation which is running at more than 8 percent and this person has really taken a beating. What we actually know is that their central bank spent a lot of last year trying different measures to prop up the ruble. It now appears that those measures are no longer as effective.
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Post by WKDWZD on Aug 15, 2023 7:58:58 GMT -5
It’s too soon to know who is right. Maybe you missed my previous response to RJ about how we should maybe return to the thread a month or so from now? The problem with our 24 hour news culture is everyone wants instant gratification. Often times it’s better to wait and see how things play out over time. What we know is, the Ruble’s value has declined over the last few months. My basic point was, devaluing currency isn’t always a bad thing and I cited several sources that made that exact same point. Specifically in Russia’s case, there are short-term benefits for currency devaluation, which indicates that they MAY be intentionally trying to weaken their currency (as some countries do at times). But can we know that with absolute certainty? No. ... The actual truth is that if a Russian person has had 10,000 rubles in the bank since January, he has less 26% less purchasing power today than he did in January because, with January as a baseline and a 26% decline in the value of the ruble, he's basically lost 2,600 rubles. Now add in inflation which is running at more than 8 percent and this person has really taken a beating ... Not quite, unless that Russian person is only spending his money internationally. In Russia his money is still worth 10,000 rubles and it's purchasing power (in Russia) has only been reduced by his own countries rate of inflation. Much the same as your savings are worth 8.2% less than last year and similarly so are mine.
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Post by soulflower on Aug 15, 2023 8:12:54 GMT -5
It’s too soon to know who is right. Maybe you missed my previous response to RJ about how we should maybe return to the thread a month or so from now? The problem with our 24 hour news culture is everyone wants instant gratification. Often times it’s better to wait and see how things play out over time. What we know is, the Ruble’s value has declined over the last few months. My basic point was, devaluing currency isn’t always a bad thing and I cited several sources that made that exact same point. Specifically in Russia’s case, there are short-term benefits for currency devaluation, which indicates that they MAY be intentionally trying to weaken their currency (as some countries do at times). But can we know that with absolute certainty? No. I understand your basic point but as you said it isn't always a bad thing. So even in your argument you suggest there are times when it is bad. I pointed out experts who thought this has tipped over into bad. You are once again arguing in a fashion that declares that if someone doesn't agree with you it is because they don't have your knowledge, information, or insight. Perhaps we do and simply think you have drawn the wrong conclusions. It is a very Trumpian argument to believe those that agree with you are by definition correct and those that disagree are by definition wrong. I’ve granted that my analysis could be wrong. It’s simply too to know for certain what’s going on because there are conflicting data points. I noted that Russia had huge growth through June. Another data point, their Manufacturing index, is over 50 in July which suggests that their manufacturing is stable. Germany for example, had a PMI under 40 in July, which further proves they are in a recession. So what is driving the sharp decline if other signs are pointing to growth and stability in Russia’s economy? When the Ruble declined in March of 2022, we knew exactly what caused it. Can we say that about what’s happening today given the conflicting economic data from Russia? You’re a logical person. I shouldn’t need to tell you to use critical thinking and not passively follow sensationalized news headlines…
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Post by soulflower on Aug 15, 2023 8:16:54 GMT -5
It’s too soon to know who is right. Maybe you missed my previous response to RJ about how we should maybe return to the thread a month or so from now? The problem with our 24 hour news culture is everyone wants instant gratification. Often times it’s better to wait and see how things play out over time. What we know is, the Ruble’s value has declined over the last few months. My basic point was, devaluing currency isn’t always a bad thing and I cited several sources that made that exact same point. Specifically in Russia’s case, there are short-term benefits for currency devaluation, which indicates that they MAY be intentionally trying to weaken their currency (as some countries do at times). But can we know that with absolute certainty? No. I understand your basic point but as you said it isn't always a bad thing. So even in your argument you suggest there are times when it is bad. I pointed out experts who thought this has tipped over into bad. You are once again arguing in a fashion that declares that if someone doesn't agree with you it is because they don't have your knowledge, information, or insight. Perhaps we do and simply think you have drawn the wrong conclusions. It is a very Trumpian argument to believe those that agree with you are by definition correct and those that disagree are by definition wrong. In my last response to you, I granted that my analysis could be wrong. It’s simply too to know for certain what’s going on because there are conflicting data points. I noted that Russia had huge growth through June. Another data point, their Manufacturing index, is over 50 in July which suggests that their manufacturing is stable. Germany for example, had a PMI under 40 in July, which further proves they are in a recession. So what is driving the sharp decline if other signs are pointing to growth and stability in Russia’s economy? When the Ruble declined in March of 2022, we knew exactly what caused it. Can we say that about what’s happening today given the conflicting economic data from Russia? You’re a logical person. I shouldn’t need to tell you to use critical thinking and not passively follow sensationalized news headlines.
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Post by Rael on Aug 15, 2023 8:33:03 GMT -5
I understand your basic point but as you said it isn't always a bad thing. So even in your argument you suggest there are times when it is bad. I pointed out experts who thought this has tipped over into bad. You are once again arguing in a fashion that declares that if someone doesn't agree with you it is because they don't have your knowledge, information, or insight. Perhaps we do and simply think you have drawn the wrong conclusions. It is a very Trumpian argument to believe those that agree with you are by definition correct and those that disagree are by definition wrong. In my last response to you, I granted that my analysis could be wrong. It’s simply too to know for certain what’s going on because there are conflicting data points. I noted that Russia had huge growth through June. Another data point, their Manufacturing index, is over 50 in July which suggests that their manufacturing is stable. Germany for example, had a PMI under 40 in July, which further proves they are in a recession. So what is driving the sharp decline if other signs are pointing to growth and stability in Russia’s economy? When the Ruble declined in March of 2022, we knew exactly what caused it. Can we say that about what’s happening today given the conflicting economic data from Russia? You’re a logical person. I shouldn’t need to tell you to use critical thinking and not passively follow sensationalized news headlines. I read the actual articles not just the headlines: Some excerpts: None of that sounds like the actions associated with a planned ruble devaluation.
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Post by soulflower on Aug 15, 2023 8:43:58 GMT -5
In my last response to you, I granted that my analysis could be wrong. It’s simply too to know for certain what’s going on because there are conflicting data points. I noted that Russia had huge growth through June. Another data point, their Manufacturing index, is over 50 in July which suggests that their manufacturing is stable. Germany for example, had a PMI under 40 in July, which further proves they are in a recession. So what is driving the sharp decline if other signs are pointing to growth and stability in Russia’s economy? When the Ruble declined in March of 2022, we knew exactly what caused it. Can we say that about what’s happening today given the conflicting economic data from Russia? You’re a logical person. I shouldn’t need to tell you to use critical thinking and not passively follow sensationalized news headlines. I read the actual articles not just the headlines: Some excerpts: None of that sounds like the actions associated with a planned ruble devaluation. They’re absolutely not raising interest rates because they want to. They’re making these moves because of the circumstances. That much we agree on. I think they prefer a weaker Ruble currently. I guess you disagree. The weaker Ruble makes imports more expensive for people who live in Russia but it has the benefit of making Russian exports cheaper on the global market. Which should boost their revenues from trade, including the oil trade (assuming they’ll sell more oil and other exports). It’s complicated because there are other data points that show Russia’s economic growth over the last few months…
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Post by Rael on Aug 15, 2023 8:51:22 GMT -5
I read the actual articles not just the headlines: Some excerpts: None of that sounds like the actions associated with a planned ruble devaluation. They’re absolutely not raising interest rates because they want to. They’re making these moves because of the circumstances. That much we agree on. I think they prefer a weaker Ruble currently. I guess you disagree. The weaker Ruble makes imports more expensive for people who live in Russia but it has the benefit of making Russian exports cheaper on the global market. Which should boost their revenues from trade, including the oil trade. It’s complicated because there are other data points that show Russia’s economic growth over the last few months… Well it "boosted" their revenue a whopping -9.9 billion dollars on oil and gas exports. But they wanted to have that happen, right? If they wanted the weaker ruble, why would they hold "an emergency meeting to address the ruble's sudden plunge"? So, now it is complicated. Before I was just not using logic and was apparently posting below my normal standards. But now it is complicated. Got it.
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Post by soulflower on Aug 15, 2023 9:13:14 GMT -5
They’re absolutely not raising interest rates because they want to. They’re making these moves because of the circumstances. That much we agree on. I think they prefer a weaker Ruble currently. I guess you disagree. The weaker Ruble makes imports more expensive for people who live in Russia but it has the benefit of making Russian exports cheaper on the global market. Which should boost their revenues from trade, including the oil trade. It’s complicated because there are other data points that show Russia’s economic growth over the last few months… Well it "boosted" their revenue a whopping -9.9 billion dollars on oil and gas exports. But they wanted to have that happen, right? If they wanted the weaker ruble, why would they hold "an emergency meeting to address the ruble's sudden plunge"? So, now it is complicated. Before I was just not using logic and was apparently posting below my normal standards. But now it is complicated. Got it. You started with the snark by calling me “Trumpian”. Did you forget that? I try to be civil with everyone here even when I have strong opinions on a topic so I dont appreciate the view that I’m not open-minded or not willing to listen to other points of view. If that were true, I wouldn’t frequent this forum. I love hearing opinions other than my own. But if I feel strongly about an issue, it’s difficult to get me to change my mind. I’m guilty of that but everyone else here is too. Back to the topic, The article below from a Canadian news outlet (via Yahoo finance) is the best and most balanced analysis of this topic. I recommend that you and others read it in full. Basically, the decline of the Ruble is caused by the sanctions (which we already knew since 2022) but Russia’s economy overall is weathering and evading the sanctions: Russia's ruble has tumbled. What does it mean for the wartime economy?
Russia's ruble has fallen a long way in recent months, and the country’s central bank has stepped in to try to halt the slide.
Until now, the government stood aside as the declining ruble helped its budget. But a weaker currency also poses the threat of higher prices for everyday people in Russia — and the government has finally moved to halt the drop.
WHY IS THE RUBLE FALLING?
Economic fundamentals play a role, though they aren't the whole story. Russia is selling less abroad — mainly reflected in falling revenue from oil and natural gas — and it's importing more. When goods are imported to Russia, people or companies have to sell rubles for foreign currency such as dollars or euros. That tends to lower the ruble's exchange rate.
Russia's trade surplus — meaning it sells more goods to other countries than what it buys — has shrunk. Trade surpluses typically support a country's currency. Previously, Russia saw a large trade surplus because of high oil prices and plummeting imports after Russia invaded Ukraine.
But oil prices have dipped this year, and it's more cumbersome for Russia to sell its oil due to Western sanctions, including price caps on crude and oil products like diesel.
“Significantly lower inflows of foreign currency due to the drop in exports are the key driver” of the ruble’s decline, according to the Kyiv School of Economics Institute.
Meanwhile, imports have started to recover after nearly a year and a half of war as Russians find ways around sanctions. Some trade has been rerouted to Asian countries that are not participating in sanctions. And importers have found ways to ship goods through nearby countries such as Armenia, Georgia and Kazakhstan.
At the same time, Russia has ramped up defense spending, pumping money into companies that make weapons, for instance. Companies must import parts and raw materials, while some of the government spending finds its way into the pockets of workers, especially because Russia is facing labor shortages.
That government spending, along with the willingness of India and China to buy Russia oil, is helping the economy perform better than many had expected. The International Monetary Fund said last month that it expects Russia's economy to grow 1.5% this year.
DOES THIS MEAN SANCTIONS ARE WORKING?
Yes and no. Exports have fallen because Western allies have boycotted Russian oil and imposed a price cap on those exports to non-Western nations. The sanctions work by preventing insurers or shippers — mainly based in the West — from handling Russian oil above $60 a barrel.
The cap and boycott instituted at the end of last year has forced Russia to sell at a discount and take expensive steps such as obtaining a fleet of ghost tankers that are beyond the reach of sanctions. And Russia cut off most natural gas sales to Europe, its biggest customer.
Oil revenue fell 23% in the first half of this year but Russia still earned $425 million a day from oil sales, according to the Kyiv School of Economics.
However, higher oil prices have recently sent Moscow’s supplies above the price cap, the International Energy Agency said in an August report.
The rebound in imports shows that Russia is finding ways around sanctions and boycotts. It's more expensive and cumbersome, but if someone needs an iPhone or a Western-made car, they can get it.
So the ruble's fall was caused by sanctions, successful efforts to evade their impact and Russia's war effort itself.
IS RUSSIA HAVING AN ECONOMIC CRISIS?
No, says Chris Weafer, CEO of Macro Advisory Partners. "The lower ruble is partly a reflection of the effect of sanctions, but it doesn’t indicate an underlying economic crisis."
The falling ruble actually has helped the government in important ways. A lower exchange rate means more rubles for every dollar of earnings from oil and other products it sells. That bolsters government spending on the military and on social programs aimed at blunting the impact of sanctions on the Russian people.
“What the central bank and the Finance Ministry has done over the last several months, is they’ve tried to compensate for the drop in the dollar value of oil receipts with the weaker ruble, so that therefore the deficit in terms of spending could be contained and more manageable," Weafer said.
Amid sanctions and restrictions on moving money out of the country, the ruble exchange rate is largely in the hands of the central bank, which can advise major exporters when to exchange their dollar earnings into Russian currency.
When the ruble fell below 100, however, the Kremlin and the central bank drew a line.
“The weakness was planned, but it’s overdone and they want to pull it back," said Weafer, who foresees the ruble trading in the mid-90s in the coming months, roughly where the government wants it.ca.finance.yahoo.com/news/russias-ruble-tumbled-does-mean-131359968.htmlWhere I disagree with the article is, if the goal was to ‘cripple’ Russia’s economy and halt their production of weapons for the war in Ukraine, the sanctions have failed to do what was intended. At best the sanctions succeeded at causing some economic instability in Russia…
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Post by JoyinMudville on Aug 15, 2023 9:15:14 GMT -5
... The actual truth is that if a Russian person has had 10,000 rubles in the bank since January, he has less 26% less purchasing power today than he did in January because, with January as a baseline and a 26% decline in the value of the ruble, he's basically lost 2,600 rubles. Now add in inflation which is running at more than 8 percent and this person has really taken a beating ... Not quite, unless that Russian person is only spending his money internationally. In Russia his money is still worth 10,000 rubles and it's purchasing power (in Russia) has only been reduced by his own countries rate of inflation. Much the same as your savings are worth 8.2% less than last year and similarly so are mine. Interesting take. I guess you could argue that I'm double counting the loss (devaluation plus inflation) as opposed to saying, as you indicate, that the devaluation is fueling the inflation which results in the loss of purchasing power. Regardless, that person with 10,000 rubles is getting hit hard by this.
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Post by Rael on Aug 15, 2023 9:22:58 GMT -5
Well it "boosted" their revenue a whopping -9.9 billion dollars on oil and gas exports. But they wanted to have that happen, right? If they wanted the weaker ruble, why would they hold "an emergency meeting to address the ruble's sudden plunge"? So, now it is complicated. Before I was just not using logic and was apparently posting below my normal standards. But now it is complicated. Got it. You started with the snark by calling me “Trumpian”. Did you forget that? I try to be civil with everyone here even when I have strong opinions on a topic so I dont appreciate the view that I’m not open-minded or not willing to listen to other points of view. If that were true, I wouldn’t frequent this forum. I love hearing opinions other than my own. But if I feel strongly about an issue, it’s difficult to get me to change my mind. I’m guilty of that but everyone else here is too. Back to the topic, The article below from a Canadian news outlet (via Yahoo finance) is the best and most balanced analysis of this topic. I recommend that you and others read it in full. Basically, the decline of the Ruble is caused by the sanctions (which we already knew since 2022) but Russia’s economy overall is weathering and evading the sanctions: Russia's ruble has tumbled. What does it mean for the wartime economy?
Russia's ruble has fallen a long way in recent months, and the country’s central bank has stepped in to try to halt the slide.
Until now, the government stood aside as the declining ruble helped its budget. But a weaker currency also poses the threat of higher prices for everyday people in Russia — and the government has finally moved to halt the drop.
WHY IS THE RUBLE FALLING?
Economic fundamentals play a role, though they aren't the whole story. Russia is selling less abroad — mainly reflected in falling revenue from oil and natural gas — and it's importing more. When goods are imported to Russia, people or companies have to sell rubles for foreign currency such as dollars or euros. That tends to lower the ruble's exchange rate.
Russia's trade surplus — meaning it sells more goods to other countries than what it buys — has shrunk. Trade surpluses typically support a country's currency. Previously, Russia saw a large trade surplus because of high oil prices and plummeting imports after Russia invaded Ukraine.
But oil prices have dipped this year, and it's more cumbersome for Russia to sell its oil due to Western sanctions, including price caps on crude and oil products like diesel.
“Significantly lower inflows of foreign currency due to the drop in exports are the key driver” of the ruble’s decline, according to the Kyiv School of Economics Institute.
Meanwhile, imports have started to recover after nearly a year and a half of war as Russians find ways around sanctions. Some trade has been rerouted to Asian countries that are not participating in sanctions. And importers have found ways to ship goods through nearby countries such as Armenia, Georgia and Kazakhstan.
At the same time, Russia has ramped up defense spending, pumping money into companies that make weapons, for instance. Companies must import parts and raw materials, while some of the government spending finds its way into the pockets of workers, especially because Russia is facing labor shortages.
That government spending, along with the willingness of India and China to buy Russia oil, is helping the economy perform better than many had expected. The International Monetary Fund said last month that it expects Russia's economy to grow 1.5% this year.
DOES THIS MEAN SANCTIONS ARE WORKING?
Yes and no. Exports have fallen because Western allies have boycotted Russian oil and imposed a price cap on those exports to non-Western nations. The sanctions work by preventing insurers or shippers — mainly based in the West — from handling Russian oil above $60 a barrel.
The cap and boycott instituted at the end of last year has forced Russia to sell at a discount and take expensive steps such as obtaining a fleet of ghost tankers that are beyond the reach of sanctions. And Russia cut off most natural gas sales to Europe, its biggest customer.
Oil revenue fell 23% in the first half of this year but Russia still earned $425 million a day from oil sales, according to the Kyiv School of Economics.
However, higher oil prices have recently sent Moscow’s supplies above the price cap, the International Energy Agency said in an August report.
The rebound in imports shows that Russia is finding ways around sanctions and boycotts. It's more expensive and cumbersome, but if someone needs an iPhone or a Western-made car, they can get it.
So the ruble's fall was caused by sanctions, successful efforts to evade their impact and Russia's war effort itself.
IS RUSSIA HAVING AN ECONOMIC CRISIS?
No, says Chris Weafer, CEO of Macro Advisory Partners. "The lower ruble is partly a reflection of the effect of sanctions, but it doesn’t indicate an underlying economic crisis."
The falling ruble actually has helped the government in important ways. A lower exchange rate means more rubles for every dollar of earnings from oil and other products it sells. That bolsters government spending on the military and on social programs aimed at blunting the impact of sanctions on the Russian people.
“What the central bank and the Finance Ministry has done over the last several months, is they’ve tried to compensate for the drop in the dollar value of oil receipts with the weaker ruble, so that therefore the deficit in terms of spending could be contained and more manageable," Weafer said.
Amid sanctions and restrictions on moving money out of the country, the ruble exchange rate is largely in the hands of the central bank, which can advise major exporters when to exchange their dollar earnings into Russian currency.
When the ruble fell below 100, however, the Kremlin and the central bank drew a line.
“The weakness was planned, but it’s overdone and they want to pull it back," said Weafer, who foresees the ruble trading in the mid-90s in the coming months, roughly where the government wants it.ca.finance.yahoo.com/news/russias-ruble-tumbled-does-mean-131359968.htmlWhere I disagree with the article is, if the goal was to ‘cripple’ Russia’s economy and halt their production of weapons for the war in Ukraine, the sanctions have failed to do what was intended. At best the sanctions succeeded at causing some economic instability in Russia… Actually you started it with "You are smarter than this" which is the opposite of a humble brag. Kind of a complimentary insult. Kind of "you are smarter than the stupid post you just made". That was 13 hours before my "Trumpian" post. So let's not get all in a tizzy here. Have sanctions "crippled" Russia's economy? Perhaps not. Have they applied pressure that is building over time, I believe they have and economic pressure has to have time to trickle down to the populace before it does any good. This is happening. It isn't overnight and perhaps it was oversold but it is still a valuable pressure point.
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Post by soulflower on Aug 15, 2023 9:52:04 GMT -5
Have sanctions "crippled" Russia's economy? Perhaps not. Have they applied pressure that is building over time, I believe they have and economic pressure has to have time to trickle down to the populace before it does any good. This is happening. It isn't overnight and perhaps it was oversold but it is still a valuable pressure point. Only if it’s used as leverage for incentivizing Putin to make concessions to end the war in Ukraine. Short of that, these policies aren’t likely to cripple Russia’s economy. The initial shock of economic sanctions are usually the worst. They almost never hurt more over time because sanctioned countries usually find ways to evade sanctions and absorb the impact. Look at Iran, Cuba, and North Korea for example. They may be poor countries but they’re maintaining stability and even punching above their weight class in some economic aspects. What could really hurt Russia are secondary sanctions on the countries that buy most of their oil (ie India and China). But that could easily backfire on us and our allies in the EU so it’s not likely to happen. Which means, Russia will most likely be able to use oil and grain exports to keep their economy stable for the foreseeable future. “Crippling” their economy may not possible without harming our own economy.
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Post by Rael on Aug 15, 2023 9:57:29 GMT -5
Have sanctions "crippled" Russia's economy? Perhaps not. Have they applied pressure that is building over time, I believe they have and economic pressure has to have time to trickle down to the populace before it does any good. This is happening. It isn't overnight and perhaps it was oversold but it is still a valuable pressure point. Only if it’s used as leverage for incentivizing Putin to make concessions to end the war in Ukraine. Short of that, these policies aren’t likely to cripple Russia’s economy. The initial shock of economic sanctions are usually the worst. They almost never hurt more over time because sanctioned countries usually find ways to evade sanctions and absorb the impact. Look at Iran, Cuba, and North Korea for example. They may be poor countries but they’re maintaining stability and even punching above their weight class in some economic aspects. What could really hurt Russia are secondary sanctions on the countries that buy most of their oil (ie India and China). But that could easily backfire on us and our allies in the EU so it’s not likely to happen. Which means, Russia will most likely be able to use oil and grain exports to keep their economy stable for the foreseeable future. “Crippling” their economy may not possible without harming our own economy. That very well may be true. But like chemotherapy, which poisons the body in an attempt to outlast the cancer, it may be worth it. Not saying it is definitely worth it, as I never suggested I know the best way to proceed, just that it may be worth it.
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Post by soulflower on Aug 15, 2023 10:09:23 GMT -5
Only if it’s used as leverage for incentivizing Putin to make concessions to end the war in Ukraine. Short of that, these policies aren’t likely to cripple Russia’s economy. The initial shock of economic sanctions are usually the worst. They almost never hurt more over time because sanctioned countries usually find ways to evade sanctions and absorb the impact. Look at Iran, Cuba, and North Korea for example. They may be poor countries but they’re maintaining stability and even punching above their weight class in some economic aspects. What could really hurt Russia are secondary sanctions on the countries that buy most of their oil (ie India and China). But that could easily backfire on us and our allies in the EU so it’s not likely to happen. Which means, Russia will most likely be able to use oil and grain exports to keep their economy stable for the foreseeable future. “Crippling” their economy may not possible without harming our own economy. That very well may be true. But like chemotherapy, which poisons the body in an attempt to outlast the cancer, it may be worth it. Not saying it is definitely worth it, as I never suggested I know the best way to proceed, just that it may be worth it. I don’t know about you but this is like watching a Chess game for me. It’s fascinating to watch how each side responds to each other’s moves. Geopolitics is way more interesting than domestic politics. Again, I’m a nerd 🤓
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Post by Ranger John on Aug 15, 2023 16:58:47 GMT -5
Apparently Russia jacked up its interest rate to 12% to try to tackle this today. I don't think it's going to work.
The idea behind this is to attract foreign investment. But it seems unlikely to me that the major world economies will decide to invest in Russia while the war continues. It might attract some attention from China, but the Chinese economy is in dire straits with the real estate bubble and exports cratering, so I would expect the Chinese to not be going abroad making more risky investments. They might go abroad for safe havens, but that's not Russia. India is in a similar position, with probably a somewhat stronger economy. And the Gulf oil states are unlikely to try making investments given Russia is an economic competitor.
The other problem is usually jacking interest rates have a deflationary effect on the economy. This is something that Russia *CLAIMS* is not a problem right now. Jacking up the interest rates on an economy with relatively low inflation could lead to a deflationary problem like China is having.
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Post by soulflower on Aug 15, 2023 17:17:27 GMT -5
Apparently Russia jacked up its interest rate to 12% to try to tackle this today. I don't think it's going to work. The idea behind this is to attract foreign investment. But it seems unlikely to me that the major world economies will decide to invest in Russia while the war continues. It might attract some attention from China, but the Chinese economy is in dire straits with the real estate bubble and exports cratering, so I would expect the Chinese to not be going abroad making more risky investments. They might go abroad for safe havens, but that's not Russia. India is in a similar position, with probably a somewhat stronger economy. And the Gulf oil states are unlikely to try making investments given Russia is an economic competitor. The other problem is usually jacking interest rates have a deflationary effect on the economy. This is something that Russia *CLAIMS* is not a problem right now. Jacking up the interest rates on an economy with relatively low inflation could lead to a deflationary problem like China is having. Where are you getting your information from? Russia admits that inflation is the problem that they're addressing with the interest rate hikes: "The central bank says demand for goods has exceeded the country’s ability to expand output, increasing inflation and affecting “the ruble’s exchange rate dynamics through elevated demand for imports.” apnews.com/article/russia-central-bank-ruble-interest-rates-a680b840eaae767471180e2dca34fc86
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Post by Ranger John on Aug 15, 2023 17:23:07 GMT -5
Apparently Russia jacked up its interest rate to 12% to try to tackle this today. I don't think it's going to work. The idea behind this is to attract foreign investment. But it seems unlikely to me that the major world economies will decide to invest in Russia while the war continues. It might attract some attention from China, but the Chinese economy is in dire straits with the real estate bubble and exports cratering, so I would expect the Chinese to not be going abroad making more risky investments. They might go abroad for safe havens, but that's not Russia. India is in a similar position, with probably a somewhat stronger economy. And the Gulf oil states are unlikely to try making investments given Russia is an economic competitor. The other problem is usually jacking interest rates have a deflationary effect on the economy. This is something that Russia *CLAIMS* is not a problem right now. Jacking up the interest rates on an economy with relatively low inflation could lead to a deflationary problem like China is having. Where are you getting your information from? Russia admits that inflation is the problem that they're addressing with the interest rate hikes: "The central bank says demand for goods has exceeded the country’s ability to expand output, increasing inflation and affecting “the ruble’s exchange rate dynamics through elevated demand for imports.” apnews.com/article/russia-central-bank-ruble-interest-rates-a680b840eaae767471180e2dca34fc86 www.statista.com/statistics/276323/monthly-inflation-rate-in-russia/The inflation rate in Russia has been between 3.5% and 2.3% since March. Does that sound like Russia has an inflation problem to you? I mean, it did between February '22 and February this year. But it has been well controlled for a few months now.
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Post by soulflower on Aug 15, 2023 17:26:53 GMT -5
Your link is through June. The Ruble collapsed a bit more since June. For the tenth time, a weaker Ruble makes imports for Russians more expensive while making Russia's exports less expensive on the global market. So the weaker Ruble is causing inflation for Russians at home. They don't want the value of the Ruble to decrease so much that it increases economic pain for ordinary Russians.
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Post by JoyinMudville on Aug 15, 2023 17:29:39 GMT -5
Your link is through June. The Ruble collapsed a bit more since June. For the tenth time, a weaker Ruble makes imports for Russians more expensive while making Russia's exports less expensive on the global market. So the weaker Ruble is causing inflation for Russians at home. They don't want the value of the Ruble to decrease so much that it increases economic pain for ordinary Russians. Too late for that
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Post by Ranger John on Aug 15, 2023 17:37:23 GMT -5
Your link is through June. The Ruble collapsed a bit more since June. For the tenth time, a weaker Ruble makes imports for Russians more expensive while making Russia's exports less expensive on the global market. So the weaker Ruble is causing inflation for Russians at home. They don't want the value of the Ruble to decrease so much that it increases economic pain for ordinary Russians. This chart has it through July: tradingeconomics.com/russia/inflation-cpi So it bumped back up to 4.3%. Still doesn't seem like panic time to me. Especially since it was 14.3% this time last year. 4.3% inflation is pretty on par with a lot of other countries right now, too. Also for the 10th time: a currency that loses 5-10% of it's value has some economic benefits when it comes to selling product on the global market. A currency that loses 40% of it's value is a collapsing economy. Stop repeating your nonsense until you address this. Never mind that Russia has already had to lower prices for it's goods because it's made itself an international pariah and many countries are outright refusing to do business with it. If anything, it should be looking for ways to prop up its prices.
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Post by soulflower on Aug 15, 2023 17:46:43 GMT -5
Your link is through June. The Ruble collapsed a bit more since June. For the tenth time, a weaker Ruble makes imports for Russians more expensive while making Russia's exports less expensive on the global market. So the weaker Ruble is causing inflation for Russians at home. They don't want the value of the Ruble to decrease so much that it increases economic pain for ordinary Russians. This chart has it through July: tradingeconomics.com/russia/inflation-cpi So it bumped back up to 4.3%. Still doesn't seem like panic time to me. Especially since it was 14.3% this time last year. 4.3% inflation is pretty on par with a lot of other countries right now, too. Also for the 10th time: a currency that loses 5-10% of it's value has some economic benefits when it comes to selling product on the global market. A currency that loses 40% of it's value is a collapsing economy. Stop repeating your nonsense until you address this. Never mind that Russia has already had to lower prices for it's goods because it's made itself an international pariah and many countries are outright refusing to do business with it. If anything, it should be looking for ways to prop up its prices. No one in Russia seems to be panicking from what I can tell just as Americans aren’t panicking about our Fed raising our interest rates. Most countries outside of the US and EU continue to do business as usual with Russia. We can agree that Russia was in better standing geopolitically before invading Ukraine but their standing around the globe (outside of the West) has held up much better than I had expected prior to the invasion.
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Post by Ranger John on Aug 15, 2023 17:49:13 GMT -5
This chart has it through July: tradingeconomics.com/russia/inflation-cpi So it bumped back up to 4.3%. Still doesn't seem like panic time to me. Especially since it was 14.3% this time last year. 4.3% inflation is pretty on par with a lot of other countries right now, too. Also for the 10th time: a currency that loses 5-10% of it's value has some economic benefits when it comes to selling product on the global market. A currency that loses 40% of it's value is a collapsing economy. Stop repeating your nonsense until you address this. Never mind that Russia has already had to lower prices for it's goods because it's made itself an international pariah and many countries are outright refusing to do business with it. If anything, it should be looking for ways to prop up its prices. No one in Russia seems to be panicking from what I can tell just as Americans aren’t panicking about our Fed raising our interest rates. Most countries outside of the US and EU continue to do business as usual with Russia. We can agree that Russia was in better standing geopolitically before invading Ukraine but their standing around the globe (outside of the West) has held up much better than I had expected prior to the invasion. Yeah, because the central bank jacking up interest rates to 12% - 350 basis points - in a day isn't panicky at all. ARE YOU LISTENING TO YOURSELF?!?
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Post by soulflower on Aug 15, 2023 17:56:21 GMT -5
No one in Russia seems to be panicking from what I can tell just as Americans aren’t panicking about our Fed raising our interest rates. Most countries outside of the US and EU continue to do business as usual with Russia. We can agree that Russia was in better standing geopolitically before invading Ukraine but their standing around the globe (outside of the West) has held up much better than I had expected prior to the invasion. Yeah, because the central bank jacking up interest rates to 12% - 350 basis points - in a day isn't panicky at all. ARE YOU LISTENING TO YOURSELF?!? The article below summarizes everything this thread is about. I encourage you to read it ca.finance.yahoo.com/news/russias-ruble-tumbled-does-mean-131359968.html
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Post by Ranger John on Aug 15, 2023 18:10:32 GMT -5
Yeah, because the central bank jacking up interest rates to 12% - 350 basis points - in a day isn't panicky at all. ARE YOU LISTENING TO YOURSELF?!? You’re pretty cocky for a guy who didn’t know until a few minutes ago that inflation is rising in Russia. The article below summarizes everything this thread is about. I encourage you to read it ca.finance.yahoo.com/news/russias-ruble-tumbled-does-mean-131359968.html1) Compared to over last winter, when inflation was the wrong side of 10% and they didn't do a thing with their 7.75% interest rate, inflation is well controlled in Russia right now. 2) Inflation bumping up to 4.3% from 3.whatever is considered background noise pretty much everywhere else. It isn't rising in any meaningful sense - no matter how badly you want it to be... Unless the people compiling the data in Russia have been lying their asses off about it. Now, I'll admit that there is a STRONG possibility that the economic data coming out of Russia could be complete and utter nonsense. Which would explain why their inflation rate seems to be well controlled in spite of their currency rapidly losing value. And it would also explain why the Russian Central Bank appears to be panicking over this and making drastic moves. But if that's the case, that just gets us back to the sanctions are working, the Russian government has done a great job of papering over the growing cracks in the economy with bogus data, and the whole house of cards is about to come crashing down with the Ruble.
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Post by JoyinMudville on Aug 15, 2023 21:41:27 GMT -5
This chart has it through July: tradingeconomics.com/russia/inflation-cpi So it bumped back up to 4.3%. Still doesn't seem like panic time to me. Especially since it was 14.3% this time last year. 4.3% inflation is pretty on par with a lot of other countries right now, too. Also for the 10th time: a currency that loses 5-10% of it's value has some economic benefits when it comes to selling product on the global market. A currency that loses 40% of it's value is a collapsing economy. Stop repeating your nonsense until you address this. Never mind that Russia has already had to lower prices for it's goods because it's made itself an international pariah and many countries are outright refusing to do business with it. If anything, it should be looking for ways to prop up its prices. No one in Russia seems to be panicking from what I can tell just as Americans aren’t panicking about our Fed raising our interest rates. Do you ever actually listen to yourself? The Central Bank raised interest rates by 3.5 percent in a morning. It is now at 12 percent. The Fed has periodically raised rates by a half or a quarter of a point. The Russians are basically trying shock therapy to arrest the ruble's free fall.
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