Posted on 10/14/2015 11:49:31 AM PDT by Lorianne
The Kremlin has launched an incredible volte-face in economic policy and turned to traditional industries like farming in the face of tumbling oil prices ___ Russia has abandoned hopes for a lasting recovery in oil prices, bracing for a new era of abundant crude as US shale production transforms the global energy market.
The Kremlin has launched a radical shift in strategy, rationing funds for the once-sacrosanct oil and gas industry and relying instead on a revival of manufacturing and farming, driven by a much more competitive rouble.
"We have to have prudent forecasts. Our budget is based very conservative assumptions of oil at around $50 a barrel," said Vladimir Putin, the Russian president.
"It is no secret that if the price goes down, investment peters out and disappears," he told a group of investors at VTB Capital's 'Russia Calling!' forum in Moscow.
The Russian finance minister, Anton Siluanov, said over-reliance on oil and gas over the last decade had been a fundamental error, leading to an overvalued currency and the slow death of other industries in a textbook case of the Dutch Disease.
"We should stop caring so much about the oil industry and leave more space for others. We have to take very tough decisions and redistribute our resources," he said.
(Excerpt) Read more at telegraph.co.uk ...
Russia is winning the climate change sweepstakes.
More arable land.
They should cash in while they can.
Meanwhile the American “new” oil industry has effectively placed a ceiling on oil prices.
Maybe they can go back to collective farming. That worked out pretty good for them.
Well, there goes the rest of Ukraine.
“The rich dark soil and the vast fields of wheat and other food products have earned Ukraine the nickname “bread basket of Europe.”
According to the CIA World Factbook, Ukraine produced 25% of all agricultural output in the former Soviet Union. Today, Ukraine exports substantial amounts of grain, vegetables, sugar beets, sunflower seeds, milk and meat.”
http://www.infoplease.com/askeds/bread-basket-europe.html
? Your thoughts...
Which means Russia is screwed. Gazprom is one of the most inefficient and corrupt oil companies in the world. The reason why Russia doesn’t have much else going on for them besides oil is because everything Russian do turns to s***.
I don’t see the $50 barrel remaining without a fundamental change.
But the timing of how long it could last is beyond me. I didn’t believe it would last this long.
Thanks.
Going down the Yellow Brick Road?....................
...because directing the economy from the Kremlin has worked so well for them in the past.
I’m thinking that this is a ‘head fake’ a la basketball. If so then I would not be surprised if several oil pipe lines in the Mid east are ‘disrupted’ sooner than later.
Gosh, it's almost as if the price of fuel has an impact on food production.
Actually, it fosters their growing relationship with China, which faces increased demand for meat and grain due to an increasingly wealthy population, along with the oil they are sending east.
The only person on Earth who is more Stalinist than Russian Stalinists is Ambrose Evans-Pritchard. The prick is Daffy Duck X 2.
The only person on Earth who is more Stalinist than Russian Stalinists is Ambrose Evans-Pritchard. The prick is Daffy Duck X 2.
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