Posted on 08/29/2022 7:07:08 AM PDT by JonPreston
Top investment banks expected Russia to suffer severe economic damage after it invaded Ukraine in February.
But Russia's economy has held up better than expected, causing them to revise those predictions.
In March, top investment bank JPMorgan said Russia's gross domestic product would fall 35% in the second quarter compared with the previous. Goldman Sachs predicted its economy would suffer its worst contraction since the Soviet Union imploded in the early 1990s. But Russia's GDP slipped only 4%
Stronger-than-expected exports of Russian commodities, including crude oil, has helped support the economy. The country has also benefited from robust demand among its own consumers and a Kremlin-devised program to keep unemployment low, according to the International Monetary Fund.
(Excerpt) Read more at finance.yahoo.com ...
When have economic sanctions ever worked?
Cuba is still under a 60 year sanction and their government still stands. Our government, OTOH, is significantly weaker since the 1960s.
That’s as close as he can get to Putin, who has cancer, psoriasis, and a drop foot.
Our stupidity raised their oil profits to record levels
Europe and the USA try to spit in God's face every day.
These same economists are saying don’t worry about inflation here at home and don’t worry about the job market that people are avoiding and don’t worry about your 401k that dropped 25% and don’t worry about higher gas and energy prices, everything’s good in Brandon’s America.
Nihilism believes it’s message over reality.
Surprise! The “experts” are really dumb. We really are led by over credentialled idiots.
A shame he couldn’t get close enough to get a blessing for some healing.
Vlad might only reach his knees however with both standing up.
All the media needs to do is walk out into the streets and see all the homelessness, lawlessness and drug addiction overtaking the US and Western allies, and see the law and order prevailing in Russia and the BRICS, to know which nations are on the ascent and which are in decline.
You are absolutely right, and just like a common drunk who doesn’t realize his condition, the West is in denial. It’s called comeuppance, and we are going to pay the price for our lousy political hires.
Russia and Iran are historically enemies. Our aggression and isolation of Russia have driven them to ally with Iran the way we are allied with Saudi Arabia. I could be wrong, but Putin does not appear to be Gog. I suspect the one who replaces him may be…
Because places like the IS are still buying oil from them
This is an effect of Russia’s extreme dependence on oil and natural gas (1/2 of GDP, more than even Saudi Arabia). Temporary high prices there, mask declines in other industries, when you look at the top line total.
Most other industries in Russia are experiencing Depressionary levels of contraction - manufacturing, airlines, advertising, tourism, and finance jump out as a few examples, that have fallen by more than half in a few months.
The European transition off of Russian oil and gas took a few months to plan and get approved and funded in the many different countries, but with few exceptions (Hungary), that is now done, and progressing at Tesla speed. Actual EU sanctions on Russian oil and gas were not established until June, but that announced phaseout is well ahead of schedule.
Russian gas exports have already imploded pretty dramatically. That excess product can’t be physically moved to other buyers, and is now just being burnt off. Over half of their former exports are gone already, most of that over the last 2-3 months.
Most (not all) of the already significant (2 million barrels per day (BPD)) reduction in European oil imports from Russia so far, have found other buyers. Despite having to sharply discount the selling price, and incurring higher expenses, the wartime surge in price has maintained total revenue, and helped to keep the economy and Government finances’ head above water, along with a money printing spree.
But oil prices are already back down a quarter from the temporary peak, and two major threats loom for Russian oil exports - December 5th sanctions, and global demand reductions from recession.
December 5th is the EU deadline to end oil tanker shipments from Russia (with a few exceptions into February). That was about. 90% of Russia’s former oil exports to Europe (10% pipeline) - about another 2 million BPD. December 5th is also planned as the date for actual secondary sanctions on other buyers of Russian oil, like China and India - the so-called price cap. So far, there have been no financial disincentives placed on other buyers, but they are coming.
Global recessions can reduce demand 10-15%, Almost double the total of Russia’s oil exports last year. Those demand drops also typically strongly create large price drops for oil. Other producers revenues get crushed when that happens, and they will be thrilled to soak up some of Russia’s former market share, to tide them over. Sanctions will drive Russia having to absorb the bulk of demand reduction.
The last remaining leg of Russia’s economy, the oil gusher, is set to rapidly contract into a squeaker. Prices may well rise again for a bit around the end of the year when that adjustment hits, but likely not for long, and possibly not at all, if the recession sets in first.
Russia can keep printing rubles like Argentina for another year, but then it would likely have to shift to Zimbabwe speed.
Putin did that.
I do believe you are on to something!
Even so I am an optimist by nature I have some serious doubt as I have a feeling the US is heading down the same path as Argentina where poor politics, corruption and graft has gotten the best of them and this cycle is not easily broken, as it is part of a mind set which took years to develop. The chains of habits are too weak to be felt until they become too strong to be broken!
For curiosity sake the current rate of inflation in Argentina is around 70 % and shows no sign of slowing, in other words they have not gotten their act together yet and neither has the US.
Even if we elect a president who may have the right ideas for attempting to get this country back onto the right track it only may slow the descent on to the trash heap of history of a once great country. So far there has been no known great country in history which has escaped this cycle
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