Skip to comments.Russia: How long until the economy cracks? (Default coming?)
Posted on 02/08/2015 7:57:57 AM PST by Red in Blue PA
Russia is skating on thin ice: Cheap oil, Western sanctions and years of mismanagement have sent its economy into a deep freeze.
Now everyone is wondering when the ice will crack.
As things stand, Russian GDP is expected to shrink by 5% (or more) this year, inflation has soared to 15%, the ruble is trading near record lows, consumer and business sentiment is on the slide, and its companies are shut out of financial markets in the U.S. and Europe.
Escalating violence in Ukraine could lead to new international sanctions, and there's little sign of a significant rebound in world oil prices.
So just how long can Russia avoid complete economic meltdown?
(Excerpt) Read more at finance.yahoo.com ...
There used to be a lot of historians that believed that “rising expectations” had more to do with the French Revolution than desperation. In the case of the Russians, it’s hard to say that they have rising expectations. They’re not as a group all that fond of liberty, the rule of law, property rights, separations of powers, etc. It may not matter a whit to them if the economy crashes as long as they can swill vodka and believe in Russian chauvinism and the great bare chested president for life, Putin.
Will Obama Surrender First ?
He and like-minded surrender monkey FReepers - fans of Putin - are keen to surrender.
An illegal usurping marxist sits in the White House. You should know all about surrender.
Only reality is a little different:
I hate finding myself in the position of defending the Russian thugs over the thugs running the USA, but there is a real world out there.
These economic sanctions are an act of war - I don’t think they will work any better than they did with Cuba. The live war in the Ukraine is going to kill a lot of Innocent people - lets hope no one miscalculates and things go nuclear.
Our current administration has had a pattern of miscalculating - or is it that the people in the USA can no longer afford to buy our own politicians and they are now bought by mid east interests and China?
Our government obviously no longer represents the interest of the American people - the government has been bought.
Then again, no one can predict the future. And if oil prices surge back this year, some of Russia's economic problems will fade.
“With so many moving parts, coming to a view as to how long reserves might last for is almost impossible,” wrote Neil Shearing, chief emerging markets economist at Capital Economics.
So many experts out there. You can always find one that matches your view.
a journeyman speculating with Questions that have no answer in a feeble attempt to ply his trade and earn his daily bread
What we need are more sanctions!
Because nakedly playing into the 500 year-old paranoia of Russians that the western powers are secretly in a cabal to bring them down at every turn, and deny them their “place in the sun”, will work out sooooo well.
Putin DEPENDS on these things in order for him to use the imagery to keep the low-info Ruskie on his team.
Those people have no working history of democracy to even realize how under the boot of dictators they still are. So the worse it gets there = the more they will be on team Putin.
Wars are often fought to mitigate exactly these issues
Winner, winner, chicken dinner!
At least the writer admits that it’s not possible to divine Russia’s economic future. Which squares with the fact that many defaults have been predicted while very few have actually happened.
I submit that static model fallacies are to blame for most faulty economic predictions.
Markets are self-correcting systems and adjust to changing conditions. This is even true in centrally planned economies, the adjustments just take longer and there is more volatility due to distortions of the market caused by attempts at control.
One amusing thing right now is watching the fevered reactions to an oil market that is being allowed to function without massive interference for the first time in years.
Since when have commodities experienced such booms and busts?
This is a very sobering article. Chewing on it all day Friday triggered a case of Libyan deja vous and prompted me to post the following yesterday on a separate thread:
"There is an absolute fever in the West to cripple Russia, and it is beginning to look desperate. The panic became evident after last February's Maidan coup failed to deliver Crimea (and Sevastopol) into Western hands and give NATO a military checkmate on Russia. Now there is an obvious campaign to demonize Putin to the point that war against Russia might be justified. Why is this?
"Might this panic arise from the threat of a gold-backed Ruble? Despite the devastating effect of sanctions on its currency, Russia has not sold one ounce of its gold, and continues (along with China) to be the largest buyer. We killed Muammar Gaddafi and bombed Libya back to the Stone Age within a year of Gaddafi's stated intent to mint a gold Dinar and to require gold payment for North African oil. Might this explain why Putin felt the need to remind the West that they are declaring economic war on a nuclear superpower? Something has the West in a panic, and it is not the threat of any Russian military invasion. Ukraine is a pawn of the West in a much bigger game."
We might have forgotten that Muammar Gaddafi had been a very good boy in the decade before we suddenly turned against him. But Gaddafi committed the unpardonable sin of using his huge gold hoard to create a Gold Dinar as the new standard of payment for North African oil. That very week, a clear-thinking fried remarked to me "Gaddafi is a dead man. The gold dinar is his death warrant." And by the way, I wonder who ended up with Libya's gold?
As I have argued repeatedly, the greatest immediate threat to the United States (and to what is left of the Christian West) is not armed invasion by Russia or anyone else - as important as such a recurring threat may be. The greatest and most immediate threat to America and the West is the destruction of the US Dollar by toppling the Petrodollar from its protected status as the world's reserve currency. I believe this explains the panic that has gripped the West since it became apparent that both the Maidan gambit and the economic sanctions appear to be failing. The chief aim or our foreign policy has been reduced to propping up the Dollar that we ourselves have debauched.
Did someone teach you that in a democracy you never lose elections?
Yawn. You just repeat crappy conspiracies.
What's a Maidan gambit? I've got my chess book out and it's not there. Much like the imaginary CIA in the paranoid schizo thinking that America is behind everything.
Economic sanctions is one of the few things the west did right. Losses to the west has been minimal, hey, Russia is not important. Meanwhile, some Russian big wig (finance minister, I think) gave a figure of $200 billion as their losses for falling oil and sanctions.
My take is we really don’t have an interest there - and a LOT to lose. I don’t worry much about the socialists that run Russia - I worry about the ones that run the USA.
That being said - If you look at everything that is happening - then think for a moment that Mideast money and China money have bought our politicians - it all makes sense. Russia and the mid east are oil exporting competitors. The mideast won the bidding war for the corruptible here. (Looks like the American folks that used to buy our politicians also got out bid).
China buys influence as well - used to be we would see very smart hardworking students from China - now it is the children of the super-rich corrupt government officials. They bought special privileges that honest people from other countries couldn’t afford.
And if you think all we need is a Republican win, sorry - today’s socialist-lite Republicans are to the left of Democrats of the 1980’s - they don’t care a hoot about silly things like free enterprise.
Did someone teach you that we are a 'democracy' and not a constitutional republic?
Of course the republic was lost when Obama was illegally installed in office, so you win.
The deliberations of the Constitutional Convention of 1787 were held in strict secrecy. Consequently, anxious citizens gathered outside Independence Hall when the proceedings ended in order to learn what had been produced behind closed doors. The answer was provided immediately. A Mrs. Powel of Philadelphia asked Benjamin Franklin, "Well, Doctor, what have we got, a republic or a monarchy?" With no hesitation whatsoever, Franklin responded, "A republic, if you can keep it."
Benjamin Franklin was right.
So when we lost elections twice to Obama we stopped being a constitutional republic in your mind. And now you’re giving up. You no longer love America. You love was conditionally based on only a constitutional conservative winning. Shame on you.
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