Russia - General Discussion.

[Ananda]

might even be one Russia would be willing to accept as a way of paying reparations without paying reparations.

But like your say in the beginning of your post, "if Russia is defeated". Without that it is just another western 'dreams'. If this war ended in stalemate as many even defense 'pundits' in West seems now tend on accepting, Russia more likely will only give money to area of Ukraine they already absorbs.

 

[Feanor]

But like your say in the beginning of your post, "if Russia is defeated". Without that it is just another western 'dreams'. If this war ended in stalemate as many even defense 'pundits' in West seems now tend on accepting, Russia more likely will only give money to area of Ukraine they already absorbs.

I think that if removal of some significant sanctions is on the table, Russia could be willing to pay financially. A de-facto if not de-jure acceptance of some Russian territorial gains as part of this settlement would have to happen. Obviously if Ukraine is still busy trying to battle Russia military, then this is off the table. I suspect what Vivendi talks about is possible on the Russian end in victory or defeat. But that's just my opinion.

 

[Ananda]

think that if removal of some significant sanctions is on the table, Russia could be willing to pay financially. A de-facto if not de-jure acceptance of some Russian territorial gains as part of this settlement would have to happen.

That potentially I agree can be one of Russian incentives to pay some kind of War Repatriation, even though they are not defeated in battle ground. However personally I don't think it is happening due to the other way around, as that's mean acceptance by some in West of Russian gains. I do see this war in the end will be a frozen conflict at the best like in Korean peninsula.

 

[Capt. Ironpants]

That potentially I agree can be one of Russian incentives to pay some kind of War Repatriation, even though they are not defeated in battle ground. However personally I don't think it is happening due to the other way around, as that's mean acceptance by some in West of Russian gains. I do see this war in the end will be a frozen conflict at the best like in Korean peninsula.

I fear you are correct that there is a possibility this could end in a frozen conflict that at best, repeat at best, would somewhat resemble the one on the Korean Peninsula. But far be it from me to predict anything about this war or how it will end.

I added an edit to my last post about the tariff scheme possibly causing as much harm to the countries implementing it as it would to Russia. I am no financial expert, and you are far better able to judge that than I.

If, repeat if, it ends in a frozen conflict with Russia keeping all or most its territorial gains (whatever they might be at that point) most of the terrible war destruction will be on territory under Russian control and reconstruction would fall to Russia there anyway. There is certainly destruction that would fall well outside that territory, too, including In Kiev itself. If Russia manages to secure the old LDNR plus a buffer zone, it will be responsible for reconstruction in areas damaged by both sides during the conflict since 2014. When it comes to the West estimating whatever reparations it thinks Russia should pay (through whatever means), I can easily imagine the Russians quibbling over damage caused by Ukraine vs damage caused by Russian and LDNR forces in territory under their control, plus complaints about inflated reconstruction costs claimed by "fat cat" American contractors in territory remaining under Ukrainian control.

But the war may well not end that way. Again, I make no predictions on that score.

 

[Ananda]

added an edit to my last post about the tariff scheme possibly causing as much harm to the countries implementing it as it would to Russia.

Any tariff scheme basically is distortion to the market mechanism. For that personally I'm not favour any tariff scheme, but understanding that it is schemes that never going away because the need from nations to get either more fiscal revenue or giving added protection to their own domestic industry. Tariff free global trade that some including WTO hoping for, I'm afraid will never happen.

This as distortion to the market, the results can provide negative effects for either exporting countries or importing countries. Usually also depends much on the nature of the commodities or products it self on market positioning that particular time.

If the products is in Sellers/Supply Side market position, tariff can provide more negative effect to the buyers/importing nation. In that market situation, sellers/exporting nation has more control on the market. Buyers actually can end up paying more economically then the potential revenue on the tariff they can get. Vice versa off course if the products is in Buyers/Demand Side market position.

For that usually economists and market practitioners give suggestions to their government to evaluate first on the position of the market certain products which is targeted to. Remember tariff can be both implement by importing and exporting nation. However in practice usually the importing nation that give more tariff.

This is more on the situation on market practice, however if it is being driven by political consideration (as what you are suggesting), then usually it can be more harmful economically. Market usually in the end will adjust more negatively on any political distortions. In the end politics is stupid and market is wise (well that's my own sentiment toward politicians any way).

But the war may well not end that way. Again, I make no predictions on that score.

Agree on that, the war is still fluid on the ground, any reversal on each sides can still happening. Then again this is already becoming attrition war since May last year. Attrition war historically will be determined by will and staying power. I just got impressions that neither side has enough staying power to overcome one of another.

 

[ngatimozart]

They are not only chipping away at the trust, but they are also destroying the functionality of their financial system.

Ten years ago people could easily open bank accounts in foreign countries, and it was easy to make international wire transfer payments. Not many questions were asked. The system worked.

Now, it is extremely difficult to open a bank account in a foreign country or to transfer money abroad. The system has been clogged by excessive regulation, KYC requirements, mandatory reporting, AML laws, etc. The system is barely working anymore.

I would say that the legacy financial system is on the brink of collapse when it comes to international transactions, and it is all because of the US and the OECD.

If the intention is to kill small businesses and international trade, than it is working as intended.



Exactly what I was saying. The financial system barely works. Imagine being that Chinese client trying to move several hundred million dollars and having to put up with all this crap, as if the money was not his. Having accumulated such wealth and not knowing wether you will be able to use it or not. That’s very low quality money if you ask me, and people have all the reasons not to trust it.

You mean most legitimate multi-million dollar businesses that are not in the financial sector. For small businesses the costs are huge, and compliance is a huge burden. For fintech startups, the rules are crippling.

For me, it is an indication that the financial system is broken.

What you’re saying is in the same line of thought the former communist regimes used, when they labeled people who fled to the West as traitors or criminals. It was not the regime’s fault that people were willing to risk their lives to escape to the West. It was simply that the people and the West were evil.

The financial system should not be a judge about who is right and who is wrong. Money transfers should not be used to censor people or to sabotage businesses. With the AML laws, the concept of “innocent until found guilty” has been destroyed. Now you are “guilty until you can prove your innocence”. It’s really crazy how low the West has fallen when it comes to personal freedoms.

This discussion has gone off topic. Please return to the topic.

Your anti US and west political beliefs are noted. Politics are forbidden here unless they are in reference to defence procurement. Read the rules please before you run into trouble with the Moderation Team.

 

[Capt. Ironpants]

Any tariff scheme basically is distortion to the market mechanism. For that personally I'm not favour any tariff scheme, but understanding that it is schemes that never going away because the need from nations to get either more fiscal revenue or giving added protection to their own domestic industry. Tariff free global trade that some including WTO hoping for, I'm afraid will never happen.

This as distortion to the market, the results can provide negative effects for either exporting countries or importing countries. Usually also depends much on the nature of the commodities or products it self on market positioning that particular time.

If the products is in Sellers/Supply Side market position, tariff can provide more negative effect to the buyers/importing nation. In that market situation, sellers/exporting nation has more control on the market. Buyers actually can end up paying more economically then the potential revenue on the tariff they can get. Vice versa off course if the products is in Buyers/Demand Side market position.

For that usually economists and market practitioners give suggestions to their government to evaluate first on the position of the market certain products which is targeted to. Remember tariff can be both implement by importing and exporting nation. However in practice usually the importing nation that give more tariff.

This is more on the situation on market practice, however if it is being driven by political consideration (as what you are suggesting), then usually it can be more harmful economically. Market usually in the end will adjust more negatively on any political distortions. In the end politics is stupid and market is wise (well that's my own sentiment toward politicians any way).



Agree on that, the war is still fluid on the ground, any reversal on each sides can still happening. Then again this is already becoming attrition war since May last year. Attrition war historically will be determined by will and staying power. I just got impressions that neither side has enough staying power to overcome one of another.

Thank you for your thoughtful reply. Just one note: the suggestion of placing a tax on Russian goods was made by @Vivendi not I. He asked me what I thought about it. I don't want to take credit for others' ideas. It seems to me a creative and clever idea, one Western politicians might consider if they or their advisors come up with the same idea (which they well might, should the situation arise that might make it a tempting solution for forcing Russia pay reparations one way or another).

At the same time, I wondered whether such tariffs would have a boomerang effect. I have read of cases where tariffs did not work out as envisioned, but of course the tariffs in question were used as protectionist measures -- as tariffs usually (always?) have been. I don't want to veer into politics, even though at least some were classic textbook cases that likely appear in college textbooks, so I won't say more about them here.

Your explanation of what could happen if such tariffs as @Vivendi envisioned were adopted makes good sense to me, and I appreciate your taking the time and trouble to explain it in a way I can understand. (Again, my knowledge of economics is limited to what I managed to learn in a single year of economics as an undergrad many years ago, and what little I have gleaned from reading since then.)

I'll take this opportunity to also thank you for your sensible posts about reserve currency, SWIFT, etc. Alarmist clickbait nonsense predicting the imminent collapse of the dollar has apparently been showing up on social media lately, as I learned from a young university student the other day. I was able to calm him down thanks in good part to you.

 

[contricusc]

Your anti US and west political beliefs are noted.

You clearly misinterpreted my posts if you came to that conclusion. I am not against the US or the West, but I am observing a trend of deterioration in the West that I find very troubling. I think the West is still better than the current alternatives, but the fact that the West becomes more alike China is something I see as being very bad. The West won the Cold War because it had more freedom and less censorship. It is disturbing to see the West having less freedom and more censorship every year.

 

[Vivendi]

Norway expels 15 Russian "diplomats", saying they are intelligence agents. This is the largest number of expulsions of Russian intelligence agents from Norway ever. Norway has expelled 20 Russians since 2021. The Russian agents focused most of their activities on two areas: Norwegian oil & gas industry, and Norwegian defence industry (which mainly consists of Kongsberg (NASAMS, NSM/JSM, PROTECTOR, etc) and Nammo (ammunition, rocket engines, etc).)

Russia has expressed unhappiness about the decision but has not responded yet. Currently there are 19 Norwegian diplomats in Russia, so I guess there will be very few left after the Russian response... Before the expulsion Russia had 40 "diplomats" in Norway.

Norge kaster ut 15 russiske diplomater

15 russiske diplomater erklæres uønsket i Norge. PST mener at de i realiteten er russiske etterretningsagenter.

www.vg.no

PST: Slik jobbet de utviste russiske etterretningsagentene i Norge

Totalt 20 russiske diplomater er de siste tre årene blitt kastet ut av Norge. PST mener diplomatene i realiteten var agenter, som blant annet har rekruttert og etablert hemmelige kilder i Norge.

www.vg.no

 

[John Fedup]

Apparently the An-124 belonging to a Russian company parked at Pearson Airport in Toronto since Feb27, 2022 is going to be given to Ukraine. Fitting partial compensation for the destruction of Ukraine’s An-225. I wonder who will pay the $1,000 plus per day parking fee to Pearson? My best guess is Canadian tax payers.


A massive Russian cargo plane that has been grounded at Toronto Pearson International Airport for more than a year will be confiscated by Ukraine, the country's prime minister says.
Ukraine says it's 'preparing to confiscate' massive Russian cargo plane parked at Toronto Pearson

 

[kato]

Funny how that completely fails to mention that this has an entirely different background.

There was a court case in Ukraine brought forward about a year ago (!) in which the court ordered the confiscation of all 12 An-124-100 operated by Volga-Dnepr. The case was about claims that Volga-Dnepr was possibly not meeting required maintenance certification standards "in collusion with Russian air safety authorities" - the confiscation nominally was ordered to "secure evidence" of this. And yes, that does sound fairly ... "constructed".

Currently three of these 12 are in Germany and one is in Canada, and Ukraine has since then been trying to get these countries to accept their court decision and hand the aircraft over, without much success.

At least for the three aircraft in Germany the airport has stated that Volga-Dnepr is in fact paying the parking fees (roughly the same amount as in Canada, per aircraft). The three were stuck at Volga-Dnepr's German maintenance base when flight restrictions were instituted against Russian companies.

 

[John Fedup]

Funny how that completely fails to mention that this has an entirely different background.

There was a court case in Ukraine brought forward about a year ago (!) in which the court ordered the confiscation of all 12 An-124-100 operated by Volga-Dnepr. The case was about claims that Volga-Dnepr was possibly not meeting required maintenance certification standards "in collusion with Russian air safety authorities" - the confiscation nominally was ordered to "secure evidence" of this.

Currently three of these 12 are in Germany and one is in Canada, and Ukraine has since then been trying to get these countries to accept their court decision and hand the aircraft over, without much success.

At least for the three aircraft in Germany the airport has stated that Volga-Dnepr is in fact paying the parking fees (roughly the same amount as in Canada, per aircraft). The three were stuck at Volga-Dnepr's German maintenance base.

Doesn't seem to be any info on parking being paid by Voga-Dnepr. Pearson, a private operation, is known for its greed and $hit service and most airlines and passengers consider as one of the worst places to go through. Any idea on the payment fee in Germany, anywhere near $1,000 CDN per day?

 

[kato]

Any idea on the payment fee in Germany, anywhere near $1,000 CDN per day?

I've seen 1073 EUR per day per aircraft stated based on the official fee table for parked aircraft at Leipzig airport. Due to the special circumstances and foreseeable long-term parking Volga-Dnepr may have negotiated a lower fee or semi-permanently rented parking space for a lower amount. The airport does not comment on how much Volga-Dnepr pays, only that they "do pay their fees regularly".

It should be noted that this is the same airport that Antonov Airlines (i.e. the Ukrainian competitor to Volga-Dnepr) moved their entire operations to after the start of the war, with usually 4-5 An-124-100 of Antonov Airlines based there now.

 

[Ananda]

Crude Oil Prices Today | OilPrice.com

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Russia's Medvedev warns Moscow will scrap grain deal if G7 bans exports

Former Russian president Dmitry Medvedev said on Sunday that if the G7 moved to ban exports to Russia, Moscow would respond by terminating the Black Sea Grain deal that enables vital exports of grain from Ukraine.

www.reuters.com

Redirect Notice

Earlier this month, there're talks by western political pundits in mainstream media on effectiveness of Western sanction toward Russian Hydrocarbons export. Stating the decrease in Russian export in Q1. Now the Russian export is rebound, and again US and allies politicians talking to increase the sanctions. When Politicians ever learn, markets will adjust on any distortions, especially political motivated distortion.

What they can hope to sanctions on ? As Russian Hydrocarbons already left most collective west market. This is part of market adjustments as market shifting. When politicians ever learn it is useless to embargoes market ? Especially on finite commodities like Hydrocarbons.

This dedolarization is one of the results, which many politicians in US forgot that weaponising dollar and other western currencies baskets will only results people find alternatives. Especially in Hydrocarbons and dollar global usage due to Hydrocarbons trade is significant.

Central banks are leading a revolt against the US dollar and shifting to gold at a record pace, market expert says

"Thus the oldest and most traditional of assets, gold, is now a vehicle of central bank revolt against the dollar," Ruchir Sharma wrote.

markets.businessinsider.com

As I have put before, this dedolarization will not means dollar going to ceased as global reserve curencies. However it is going to give on alternatives.

The yuan is not a threat to the US dollar because China is not a predictable or reliable market, former Treasury Secretary Larry Summers says

"There has never been a country where there was a strong desire to move as much capital out of the country as we're seeing in China right now."

markets.businessinsider.com

Yes, it will not be Yuan alone. However the alternatives can come out from other multiple alternatives. Several factor can results on the reduce of dollar usage on Global trade. However political follies by weaponising dollar is only give more incentive. It will not be a demise, but significant reduction on dollar power. That's also mean reduction on US influence.

 

[KipPotapych]

^ Add another bit of reality of what has been happening in Europe for the past 1.5 years or so.

European countries' bill to shield households and companies from soaring energy costs has climbed to nearly 800 billion euros, researchers said on Monday, urging countries to be more targeted in their spending to tackle the energy crisis.

European Union countries have now earmarked or allocated 681 billion euros in energy crisis speding, while Britain allocated 103 billion euros and Norway 8.1 billon euros since September 2021, according to the analysis by think-tank Bruegel.[…]

The spending earmarked by the countries on the energy crisis is now in the same league as the EU's 750-billion-euro COVID-19 recovery fund.[…]

This is back from February: Europe's spend on energy crisis nears 800 billion euros And winter turned out to be unusually warm from what I read. I find it interesting that those who note that Europe doesn’t “spend” enough on Ukraine completely avoid these (unprecedented) costs. Note that North America does not have this issue because we can sustain ourselves with natural gas in particular (and the US now sells it to Europe as well). The US, however, managed to sell 180M barrels of oil from their strategic reserves in less than a year starting last March though: U.S. sells last batch of emergency reserve oil from historic release

We all pretend that everything is fine though and there is replacement for everything everywhere.

 

[Ananda]

"If the dollar loses its status, it will be because the United States is no longer respected and strong in the world. It will be because we've accumulated a set of untenable debts," Summers added, calling the dollar's lack of dominance in that scenario the "least of our problems."

That's quote from Summers. He's right that Yuan will not going to overtake Dollars soon, but I believe he's not quite precise on the Dollar will loses its status because US no longer respected. However more likely due to non west financial market loosing more trusts with US.

US financial market is more reliable market then Chinese financial market. That's for sure, however weaponising USD and US leads western financial markets is making Non Western market loosing trusts on Western financial markets reliability and impartiality.

What is the biggest strength of collective west? Technology? Military? Well the biggest strength of collective west is actually their financial markets. This make collective west especially US can have unprecedented debt and large accumulation of capitals. If non west countries in average have similar debt level as US, most likely their currency already plummeted, got hyperinflation and large run on their markets.

So trust on the Western lead financial markets is actually the main thing that make others still want to trade their goods with US lead currencies basket. This in the end give opportunities for US lead west to accumulate more capital much larger then their actual proportion on global trade.

This is what many Western market players already warned Western Politicians in the beginning on Western drive to punish Russia. Punish them by giving weapons to Ukraine, by close access to Western goods market. However don't touch Financial markets. Don't weaponising Western Financial markets. It will bite West back as non west will lose trusts on Western financial markets reliability. The situation is not the same as in 90's, as non West capital and portion on global trade is increasing.

Now US-West lead financial market still control close to 90% of global payment transaction. If Western Financial market lose the shares toward 70% or even 60%, this will reduce US lead market abilities to issue debts to Global market. This's then that will make US current debt level as untenable (as Summers warn). Because current US and Western deficits actually issued at the basic assumption US lead financial market still control 80-90% global payments trade. Thus strong demand on USD and allies currencies.

If non west will not going to buy USD or Euro as much as now, as they don't need that much USD or Euro for their non west trading. This will in the end further limit US and it's main allies on issues debt to the market. This will reduce US and West abilities to run deficit. Which means has to reduce government spending including Military ones.

Financial markets is the main strength of the Collective West. Those who wants to end US unipolar dominance knows well the most effective way is to reduce Western financial markets dominance. Ironically now Western politicians are the ones that reducing that dominance.

 

[seaspear]

There are a number of articles on the effects of sanctions on Russia that shows it is having an effect, although Russia is able to ship petroleum products the revenue from such has dropped steeply, The sanctions have largely succeeded in reducing the revenues of oil .
Here's how sanctions are impacting the Russian economy | World Economic Forum (weforum.org)
Russia's oil exports are back to pre-war levels | CNN Business

Russian Economy Reels As Energy Revenue Plunges and Ruble Tumbles (businessinsider.com)

 

[Vivendi]

Gas storage levels in Europe are looking good, at 58%. The EU target is to fill the tanks to 90% by November. At the current rates of refilling the tanks, the 90% goal is likely to be met as soon as late August, or early September. Last year the target was met in September.

In addition, gas storage is being expanded in many European countries. More than 45bn cubic metres of capacity has been added in the Netherlands, Germany, Italy, Finland and Turkey since September, with more expansion plans in France and Greece expected to be completed later this year.

Some people said end of last year "Europe might be OK this winter, but next winter will be really tough!"... well I think we can say already now that those who made such claims will be proven wrong.

Europe’s heating season ends as gas storage passes bottom

The use of stored gas in Europe has passed bottom and gas tanks are now being refilled to be ready for next winter. (chart)European gas tank ...

www.intellinews.com

 

[Ananda]

Oil Price Charts | Oilprice.com

Oilprices from around the world.

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Those political motivate pundits that talks on Collective West effectiveness on reducing Russian revenue, actually for market people is quite laughable. The revenues are down because the price in Q1 is down.

Put the link above on what oil being trade around this moment. Look at Russian ESPO, Sokol and Urals. All now trade above USD 60 of this so call Western price cap. This is the traded data, shown people still take Russian oils above that price cap.

Why ? because overwhelming ones that taking Russian oil is not collective west anymore. This talk on Price caps effectiveness coincide with the market that at the time in Q1 also down. Now the market begin to rebound, is the cap really matters by market ? Looking at traded price, not really.

Market is not going to be dictate by political whims. Market will find a way and adjust, especially in finite commodities market like Hydrocarbons. I put this time to time as many markets players already warn politicians. Then again politicians and their pundits in mainstream media simply will not learn.

 

[contricusc]

Financial markets is the main strength of the Collective West. Those who wants to end US unipolar dominance knows well the most effective way is to reduce Western financial markets dominance. Ironically now Western politicians are the ones that reducing that dominance.

The irony in this is that Putin tried to challenge the West on the military field in Ukraine, where he is doomed to fail and the West is not suffering any losses. Instead of trying to work on an alternative to the Western financial system, he tried to compete in military power. And to think that many people called him a strategist…

Also, you are right that Western politicians are slowly eroding the power of the Western financial system. The truth is, as a European, I do hope that the monopoly on international money will be broken. The privilege of printing money with value that the Federal Reserve and the ECB have is actually a curse for the US and the EU. The US and the countries in the Eurozone have close to zero foreign exchange reserves, because they can use their own money for imports. This encourages them to keep a bloated bureaucracy and excessive government spending on welfare. In turn, this destroys the society as most people try to get a comfortable public sector job or live on welfare. The private sector is gutted by excessive labor regulation and insufficient and expensive workers.

The power of the dollar and the euro have been a curse disguised as a blessing, because they allowed Western societies to spend way above their means, resulting in a lot of accumulated problems and inefficiency. Just look at the huge money spent ln the Covid lockdowns, just because they can print as much money as they need. If they didn’t have this ability, they could have not locked down the economy in the first place, which would have been much better.

Put the link above on what oil being trade around this moment. Look at Russian ESPO, Sokol and Urals. All now trade above USD 60 of this so call Western price cap. This is the traded data, shown people still take Russian oils above that price cap.

While Russian oil blends do trade above the price cap at the moment, they are still discounted compared to Brent and were heavily discounted during Q1. It remains to be seen if the discount will tighten or widen again in the following months, and if there will be additional moves from the West to reduce the price of Russian oil below the price cap.

I don’t see why non-Western countries would pay the full price for Russian oil when Russians have nobody else to sell their oil to. The power of negotiation is with countries like India, China and Turkey when it comes to buying Russian oil, as they can buy from anybody, while Russia can only sell to them.