How Concern Are People With Russia's Economy

So thinking about this today we see the Ruble hitting 100 to the US dollar briefly when it was typically 40 to 50 in the recent past. That is basically a 50% loss in buying power. Then we look at oil which is about 60 per barrel with the world at 82 per barrel. That is another 25% loss in GDP that isn't all that big in the first place at less than Texas on a good day. Now, if we talk shipping other than a pipeline/maybe a train it is about 1/2 of 60 due to the ships not having insurance. This puts the real value of a barrel of Russian oil at about 15 bucks for them compared to 82.

The Russian ruble was near the 100 per USD level, holding at its lowest in 17 months despite the Central Bank of Russia’s announcement of an extraordinary meeting on Tuesday to support the currency amid its freefall. Economists expect the CBR to hike its rate by 150bps to 10%, extending the start of July’s tightening cycle. The ruble is 27% down against the dollar year-to-date amid a slowing economy, unbalanced currency flows, and capital flight from exiting foreign companies.

Then we have Winter is coming and boy is it on the level of Game of Thrones as oil wells freeze up and the only thing to do would be to redrill. This happened back in 1992 and it took them 10+ years to recover, but with ALL Western companies and technology gone there is no one left to keep the bandaids on their crumbling system that is 70+ years old in many cases.

Russia could find itself with no money as soon as next year and needs foreign investment, outspoken Russian oligarch Oleg Deripaska has said.

“There will be no money already next year, we need foreign investors,” he said at an economic conference in Siberia Thursday, according to comments reported by TASS, a Russian state-owned news agency.

Russia is also directly related to a starving situation in Africa and the Middle East, among other areas.

China will wait till they are at rock at bottom and desperate, then swoop in to loan them money. Probably also India to a lesser degree.

a reply to: Xtrozero

It's dark days for the oligarchs in Russia.

They've been living large, siphoning the money away from the country and the people for decades, exchanging wealth for loyalty to Putin.

And now that all that money is needed back, where do you think Putin is going to try to recover it from first, in order to maintain things and stay in power?

For Russian oligarchs it's either try to run away with all your money and possibly get caught, or just wait it out and see which way he decides to take it back anyway. Does his way also involve them getting arrested? Should have run?

originally posted by: DAVID64
China will wait till they are at rock at bottom and desperate, then swoop in to loan them money. Probably also India to a lesser degree.

I think China could look to a weak Russia and attack knowing no one will support Russia. As Russia uses up all its war supplies and has just cannon fodder troops what do you think about the Chinese sending 50 million across the border? Russia is extremely rich in natural resources China would just love to have it for free, and China would have a workforce they could use as they do with other countries and not even get their hands dirty. Also, If China loses 300 million in the process no big deal, and be kind of a win-win to cut the population down some.

a reply to: Xtrozero

I think China may be biding their time, waiting to revisit the Amur Annexation.

This was forced upon them, by Russia, not too long ago. A weak Russia is a great opportunity for China to gain their lands back. And nobody would defend Russia, not like they would with Taiwan.

originally posted by: Mahogany
Does his way also involve them getting arrested? Should have run?

I think I would run just hoping to outlast Putin as it seems Putin is killing people left and right that he disfavors. At least Putin is kind of busy right now sending his international hit squads out after the defectors killing them with radioactive materials.

a reply to: Xtrozero

I think China could look to a weak Russia and attack knowing no one will support Russia.

Not going to happen whilst Russia still has a nuclear arsenal.

We doing armchair world politics? I'll play. I don't think Russia and China are likely to turn on each other before the U.S. is at least temporarily reduced to regional power status.

originally posted by: alldaylong

Not going to happen whilst Russia still has a nuclear arsenal.

I don't think China really cares how many they lose. They could lose a billion and still be 600 million.

originally posted by: MindBodySpiritComplex
We doing armchair world politics? I'll play. I don't think Russia and China are likely to turn on each other before the U.S. is at least temporarily reduced to regional power status.

Well, they can wait a long time for that or push their own up. China is in a world of hurt right now, they need something...

originally posted by: Xtrozero

originally posted by: alldaylong

Not going to happen whilst Russia still has a nuclear arsenal.

I don't think China really cares how many they lose. They could lose a billion and still be 600 million.

i think China would be more worried about loosing major parts of it's industrial complex, which would be possible under a nuclear attack.

a reply to: Xtrozero

I think the U.S. might collapse financially and through polarization of its own population in a matter of years. Might just unravel as fast as the Soviet Union did.

originally posted by: MindBodySpiritComplex

I think the U.S. might collapse financially and through polarization of its own population in a matter of years. Might just unravel as fast as the Soviet Union did.

I don't see it since we have a tendency to peak in some direction and then there is pushback to self-correct to just see something new come along to rinse and repeat. What this means is in a few years what we see as the primary issues today will no longer be the same.

originally posted by: alldaylong

i think China would be more worried about losing major parts of its industrial complex, which would be possible under a nuclear attack.

It all depends on what they see as the better option. Lose a bunch of lives, and rebuild in some kind of full reset scenario that I think they need right now as much of their infrastructure is collapsing and they are seeing 100s of millions with no jobs and nowhere to go, so how do you fix all that?

a reply to: Xtrozero

Peter Zeihan had a major Youtube presentation on this the other day, which I highly recommend. The summary:

Ukraine has shown the ability in the last couple of weeks to threaten and damage Russian shipping even in places that Russia thought were safe (Novorossiysk, for example). They've also declared their intention to treat any ship coming in or out of a Russian port as a potential target and given two weeks notice (as of Aug. 5). This will, for all practical purposes convert the Black Sea into a war zone, for shipping. That will drive maritime insurance rates through the roof and effectively shut down the ability of Russia to export minerals, grain, and oil via the Black Sea. Most of the oil that comes out of Novorossiysk goes to either Asia or the Mediterranean. The most likely replacement for the sour crude that normally goes to Asia is from Canada. The most likely replacement for the light, sweet crude that goes to the Mediterranean is US shale crude. His prediction is that not only will the Russian wells freeze up as you suggest, but Russia will take a major economic hit and lose the ability to project its power almost anywhere, but China will also take another economic hit because most of their competitors have already bought up non-Russian crude oil and there will not be any obvious way China can replace the ≈ 3 million barrels/day that will drop off the market.

a reply to: Xtrozero

But....I thought everything was all find and dandy with the Russian economy - I'm sure someone recently described the Russian economy as 'first class' - and that sanctions are having zero effect at all?

Putin and the Oligarchs have been literally been raping Russia for the last 20 odd years and now the chickens are coming home to roost.

originally posted by: 1947boomer

Peter Zeihan

His prediction is that not only will the Russian wells freeze up as you suggest, but Russia will take a major economic hit and lose the ability to project its power almost anywhere, but China will also take another economic hit because most of their competitors have already bought up non-Russian crude oil and there will not be any obvious way China can replace the ≈ 3 million barrels/day that will drop off the market.

He is actually very easy to listen to. I kind of talk about this at the start of the Ukraine war that Ukraine cannot win militarily, but Russia could lose overall and the longer it goes on the worst it looks for Russia. Ukraine just needs to stall until winter and then Russia needs to deal with that. Next Spring we will see an even stronger Ukraine and so what is Russia to do that they could not this year?

a reply to: Xtrozero

China wouldn’t have to use force when they could just give energy collateralized loans that Russia couldn’t pay back.

originally posted by: Freeborn
a reply to: Xtrozero

But....I thought everything was all find and dandy with the Russian economy - I'm sure someone recently described the Russian economy as 'first class' - and that sanctions are having zero effect at all?

Putin and the Oligarchs have been literally been raping Russia for the last 20 odd years and now the chickens are coming home to roost.

30 years, that is why their military is in such shambles. I haven't heard the propaganda for a while now as to how all the sanctions just make Russia strong like a bear...

On a serious note I feel sorry for the Russian people coming this winter...

originally posted by: CriticalStinker

China wouldn’t have to use force when they could just give energy collateralized loans that Russia couldn’t pay back.

Life-long debt to the company store event... Just pay us massive interest in rare metals.

But my point is that China almost needs a nuke war to cover up their failures on a massive level, just blame it all on Russia and save face.