Russia - General Discussion.

[seaspear]

A recent posting by Joe Bloggs suggests that Russia's official interest rates are not accurate and for for this he includes information by an economist referencing the Phillips curve with an explanation of cause and effect since Russia claims its inflation has gone down to 8.6 but at the same time raise interest rates to 21 percent he may have a point ,

In regard to the I.M.F this article suggests some bias to authoritarian regimes

The IMF Is Returning to Russia. No One Should Be Surprised.

The International Monetary Fund’s decision to send a delegation to Russia is only the latest pro-authoritarian move from the organization under the leadership of Kristalina Georgieva, according to Yale SOM’s Jeffrey Sonnenfeld, co-author Steven Tian, and Tymofiy Mylovanov and Nataliia Shapoval...

insights.som.yale.edu

 

[Ananda]

They are not thinking like that because they are abiding by the UN Charter and international agreements which, among other things, defines when sanctions are justified or not

Keep saying that, and you like many in West will not going to understand on what others non West think. You keep thinking on Western perspective.

Global South: The “Rest” vs the West? | ISPI

The rise of the Global South is a multifaceted and intricate issue, representing a turning point for Global Politics.

www.ispionline.it

However, these views might be unfairly assessing the idea of the Global South for what it doesn't include, rather than what it actually represents. In fact, its value lies in highlighting the shared struggle these countries face in influencing the management of the international order compared to the Global North, not in a homogenous identity.

One example of such approaches was in response to the Russian invasion of Ukraine in 2022, where many Global South countries resisted adopting the sanctions regime implemented on Russia by many Global North countries. Shidore describes such a move as the pursuit of Global South's strategic autonomy and its inclination to pursue national interests over aligning with Northern positions

You want to continue keeping your Western perspective that's your rights. I put the article above just shown how seeing what Global South want simply from simplified Western perspective as you have shown will not going to understand Global South action.

Time change, Geopolitics change, and Global South want alternatives options that they can have more control or alternatives that's not control by US and Allies. They are not in one mind like I said before, but saying that Global South don't see what West can do to Russia, will not happen to them, is also wrong perspective. Remember the sanctions is Western sanctions not International Global sanctions, no matter what Washington, London or Brussels say.

They are preparing themselves so what happens to Russia on financial transactions will not happen to them, when they are crossing Western interest. They don't have big trust to each other, but they also at same time don't have big trust to Western powers. Russia and Gaza are just catalysts on that. So in time of lack confidence to each others, alternatives market channels is just one of consequences.

 

[seaspear]

I'm not sure the reference to "Global South" has the relevance you refer to most of this group voted against Russia in the United Nations ,this article questions the relevance of this term

The Term “Global South” Is Surging. It Should Be Retired.

The phrase lacks the depth and diversity of the world it purports to describe.

carnegieendowment.org

 

[Ananda]

Global South have diverse interest, but also shares interest to be carving their own path without West or any power dictate them. They don't share much trust to each other but also shares similar increasing distrust to West dominate market system. Which is why they are looking on alternative channels.

They voted against Russia in UN on Russian Invasion, but also voted against West in UN on Russian sanctions. That's also the article that I have put. They don't want to side with Russia but also reject West on sanctioning Russia. Most of them are sitting in fences. This is already happening throughout the war, and continue doing so on Geopolitics positions.

The existing world order is what they are challenged. They want to keep engaging West, but also want to engage the parties that West don't like. The later part that seems many in West don't understand.

 

[Capt. Ironpants]

Global South have diverse interest, but also shares interest to be carving their own path without West or any power dictate them. They don't share much trust to each other but also shares similar increasing distrust to West dominate market system. Which is why they are looking on alternative channels.

They voted against Russia in UN on Russian Invasion, but also voted against West in UN on Russian sanctions. That's also the article that I have put. They don't want to side with Russia but also reject West on sanctioning Russia. Most of them are sitting in fences. This is already happening throughout the war, and continue doing so on Geopolitics positions.

The existing world order is what they are challenged. They want to keep engaging West, but also want to engage the parties that West don't like. The later part that seems many in West don't understand.

The world looks a lot different from SE Asia, at least it did to me during the time I lived there. We Westerners, particularly we Americans here between two great oceans, have a particular ummm ... perspective. Most Americans have little awareness of the rest of the world outside what we call "the West" -- other than China, and most have rather mistaken ideas about China. Our news only rarely reports anything happening in Asia or Africa, and barely covers events even in South America. The recent coup in Bangladesh and its aftermath? Practically no one here has even heard of it.

Anyway, if I might ask you a question. I can sort of wrap my mind around how BRICS might manage to come up with an alternative currency to the USD, but I am too ignorant to figure out how they can construct a real alternative to SWIFT. I know Putin just announced BRICS is not pursuing its own version of SWIFT, but at the same time, I cannot understand how BRICS can have a truly alternative system without having an alternative to SWIFT. I hope you can enlighten me. I confess I am rather ignorant about these things.

 

[Ananda]

Anyway, if I might ask you a question. I can sort of wrap my mind around how BRICS might manage to come up with an alternative currency to the USD, but I am too ignorant to figure out how they can construct a real alternative to SWIFT. I know Putin just announced BRICS is not pursuing its own version of SWIFT, but at the same time, I cannot understand how BRICS can have a truly alternative system without having an alternative to SWIFT. I hope you can enlighten me. I confess I am rather ignorant about these things.

Franky speaking most in market still wondering on that. It will be big endeavor for that, as means they have to agree on one current system as base or they will built entirely new one. Like I said before, I agree there are not big trust to each other yet on practice among Global South including those in BRICS. However they also agree they need alternatives payment systems to smoothing their trade transactions outside Western dominate system like SWIFT.

Many of us suspect it will be base on Chinese CIPS (Cross Border Interbank Payment System), as it is essentially already established. However it will depend on India. As within BRICS the big decision on trade agreement actually depends on India and China, and Russia whether Putin like it or not, already relegated as third biggest in BRICS decision making.

For that Brics: What led to Modi and Xi meeting and thaw in India and China ties the meeting between Modi and Xi JinPing to thaw their border dispute is very important for BRICS. I already put this few days ago in Chinese thread, and put it again in here. Putin I suspect really hope this is happening because he knows BRICS future much depends on trust building between India and China as the two biggest players within BRICS and Global South. If they two cam agree on which payment system to be use as base, I suspect the rest including Russia will follow.

Introduction

www.cips.com.cn

CIPS off course Yuan or Reminbi (RMB) base system as against SWIFT which is USD dominated base system. Means the system will use Chinese control market like Shanghai and Hong Kong as Banks Interchange transactions clearing node, as SWIFT now mostly use New York and London (with Paris and Frankfurt to lesser extent) as Interchange clearing node. Means like SWIFT, CIPS also depend on Banks opening accounts on that markets to conduct Interchange transactions with each others.

I suspect India will want the system also going to use Mumbai market as one main Interchange node. Thus China must open their CIPS to include Mumbai, Sao Paulo and Moscow as part of Interbank Payment node. Although I suspect the node will be dominated by largest market like Shanghai, Hong Kong and Mumbai only got to lesser extent smaller portion. Just like in SWIFT where the node much happened in New York and London Interchange.

Again any international market system depends on Trust. International trade players trust off course still with Western Market (as I personally has), but recent Geopolitics like it or not also increase demand for alternative system eventough it still has less market trust with it.

 

[Fredled]

Russia lost much of it's energy market ? The market data don't show that. Their energy export is keeping their global market share, only shifting to other parts of the world.

Exact but with a little difference. They are being paid 15 to 20% less in theoretical dollar equivalent term. Everybody was scoffing at the $65 cap on Russian oil imposed by the West. At the end, that's what happened in reality.
The second thing is that a big portion of this oil is paid in Yans or in Rupees which are dificult to change for dollars in such quantities. In practice it force them to import form these countries for the equivalent amounts.

Maybe you mean that Putin decided not undertake that mobilization.

Yes, he decided because it would have been a failure and very unpopular. Instead he chose to rise the pay for contract soldiers.

 

[Feanor]

Exact but with a little difference. They are being paid 15 to 20% less in theoretical dollar equivalent term. Everybody was scoffing at the $65 cap on Russian oil imposed by the West. At the end, that's what happened in reality.
The second thing is that a big portion of this oil is paid in Yans or in Rupees which are dificult to change for dollars in such quantities. In practice it force them to import form these countries for the equivalent amounts.

Well...yes. But is that part hurting Russia? Or is it creating an incentives for economies number 1 and number 3 to go deeper on trade with Russia?

India Is Now Russia’s No. 2 Supplier of Restricted Technology

India has surged to become the second-biggest supplier of restricted critical technologies to Russia, US and European officials said, highlighting the challenge in efforts to choke off exports fueling President Vladimir Putin’s war machine.

www.bloomberg.com

Yes, he decided because it would have been a failure and very unpopular. Instead he chose to rise the pay for contract soldiers.

There's a difference between not doing something because it might fail (and it's conjecture on your part that this was Putin's reasoning) vs actually doing it and failing. You need to stop equivocating.

 

[Ananda]

Everybody was scoffing at the $65 cap on Russian oil imposed by the West. At the end, that's what happened in reality.

No the reality happen because market force, and not $65 cap that matter. Western $65 cap is much less effective then others Western sanctions on Financial market, payment system and shipping insurances. That's what make Russian has to pay premium cut around 20% from market price for their oil export, to compensate premium increase for buyers due to the sanctions.

When global oil reach $100+ per barel, Russian one sold around $80 per barel. This regardles the $ 65 cap. Shown eventough $65 cap increase some difficulty on transporting Russian Oil, but shipping insurance and Financial market sanctions are what matter most.

Western sanctions already reach the limit of what they can achieve toward Russian Global trade. What's left is try to sanctions other Players in mostly Global South on trading with Russia as effort to force them following this sanctions. That's what they are trying to by sanctions hundreds of companies and Individuals mostly in China, India, UAE, and others Global South. That's quite desperation move to risk enlarging trade war. Well let's see what Trump will do after this. He can either enlarging or deescalating this trade war (on matter of Russia trade).

second thing is that a big portion of this oil is paid in Yans or in Rupees which are dificult to change for dollars in such quantities. In practice it force them to import form these countries for the equivalent amounts.

First of all Russia doesn't need more Dollars or Euro, or Yen. Look what Russian central Banks increasing in their reserve lately, mostly gold and some Yuan. You can change any Yuan you toward Dollars on any amount, especially in Shanghai and Hong Kong market. They are very liquid and deep Financial market.

But still Russia doesn't need much dollars anymore, they don't trade much with USD or Euro, either their trade with local currency like Rupee in India, Yuan in China or Gold with Middle East or couple South East Asian market (directly or indirectly).

Again you always see on Westerners eyes, yes being cut off from Western market is hurting them but not make the end of days for Russian. Like I said Russian being sanctions by US, Euro and Allies, but not sanctions by others. Russian got western sanctions but not global sanctions (whatever western mainstream media and politicians try to picture).

As force them to use only Rupee for buying Indian stuff, perhaps as Rupee not internationaly traded as Yuan. However Yuan increasingly being accepted for Internasional trade, especially in Global South. But what matter as Feanor already put, what part it is that hurting Russia ?

 

[Capt. Ironpants]

He was certainly holding a single ear earphone plugged in the telephone set and listening silently.
Everytime there is a cool thing to happen Musk is there.

But WTF is Musk doing here? Is he the new Power behind the Throne?
Does he wants to be the Master of the World (on top of being immortal and brain enhanced)?

[Note: I am replying to your post here on this thread as it seems to belong here rather than on the Russian-Ukrainian war thread and does not involve military matters. I am mostly writing it as a cautionary tale about the sort of speculation that runs rife in our American media on the heels of an election in hopes it will calm the discourse here.]

You don't know anything for certain and neither do I. We were not there.

Numerous mainstream news outlets have reported that Musk walked into the room at some point and briefly talked to Zelensky. Several reported that Zelensky thanked Musk for Starlink, then Musk asked Zelensky how Star link was working out for them, etc., in other words, the part of the conversation Musk was involved in concerned Starlink. Here is one example, from NBC, one of the "Big Three" television networks in the USA (leans left, most certainly not pro-Trump):

Elon Musk briefly joins Trump's call with Ukrainian President Volodymyr Zelenskyy

Personally, I don't see the big deal. These "congratulations on winning the election" calls made by various world leaders are traditionally primarily social calls (similar to the condolence calls made when a former head of state dies) wherein nothing substantive or contentious is discussed, just the usual "look forward to working with you" (or "we are saddened to learn of the passing of your former president or prime minister or whatever") niceties, whether sincere or not. These congratulatory calls are generally upbeat, and the niceties about Starlink are in keeping with that. Other presidents have included business leaders in discussions with other heads of state when appropriate (involved in trade deals, infrastructure projects, etc.) in the past, and will likely do so again after Trump is gone. If all they talked about was Starlink, why the fuss?

As for the alleged call by Trump to Putin, the Kremlin has vigorously denied it ever took place, and Trump's communications director has sort of, kind of, denied it (source is BBC):

Russia denies Trump call with Putin urging restraint in Ukraine

It would be highly unusual (understatement) and against protocol for an American president-elect to call another head of state like that before receiving the customary congratulatory call from that head of state. Well, Trump can be, ah, shall we say "diifferent", but what I suspect is that there *may* have been contact made between Trump staffers and lower level Kremlin officials and not much more.

Major news outlets here in the US have been reporting all kinds of rumors based on "anonymous sources close to the campaign" as if they are fact, but turn out to be untrue. A case in point are all those reports that Trump would appoint Pompeo as SECDEF based on these same "anonymous sources close to the Trump campaign" which turned out to be utterly false.

It's pretty wild, really, but immediately following an election here there are all kinds of players trying gain a cabinet post or similar powerful position, plus those who have vested interests trying to get their names out there or highlight their special interest or issue and "steer the narrative" and so on. It happens to some extent after every election, but is a bit crazier this time around. My advice is to take everything you read in the US media regarding matters pertaining to Trump's plans and doings with a good spoonful of salt until it all shakes out. Right now, there is much speculation swirling around and not so much fact.

 

[Capt. Ironpants]

Again any international market system depends on Trust. International trade players trust off course still with Western Market (as I personally has), but recent Geopolitics like it or not also increase demand for alternative system eventough it still has less market trust with it.

As much as I would love to reply with a "thank you" to posts here, especially those which help my understanding or answer my questions, I respond with a "like" as my way of thanks so as not to interrupt the flow here if I have nothing to add. I will take this opportunity to say thank you for your excellent reply here ... before I bother you with yet another question.

This question has been bugging me since the start of this war. Remember how the American leadership was so certain that the sanctions would cause Russia to collapse (and some even thought this would bring about "regime change")? The US has an financialized economy, widely assessed to be in the most advanced stage of financialization in the world. The Russian economy is still more based on resources and industry.

It seems to me that a financialized economy would be less resilient to the sweeping sanctions imposed, and this might be one of the reasons behind their miscalculation. Is this correct, or am I not understanding something here? I've looked and looked, but never found anything exploring this question, so it might be a very stupid question.

Of course it also had to do with blind hubris and their failure to take into account that we are no longer the "sole superpower" and King daddy of the planet, and a portion of the world would not ask "how high?" whenever we said "jump", but that's separate, not part of my question.

On a side note, of course investment in R&D and infrastructure is reduced in a financialized economy. This is now showing up in our struggling capacity to produce arms sufficient to supply Ukraine and Israel and a potential conflict in Asia all at once.

From what I can gather, Germany's current economic woes also partially stem from its financialized economy. It's not the sole culprit, of course, but seems to me to be an important ingredient.

Again, I thank you. I appreciate your expertise and your measured assessments of economic matters here.

 

[seaspear]

No the reality happen because market force, and not $65 cap that matter. Western $65 cap is much less effective then others Western sanctions on Financial market, payment system and shipping insurances. That's what make Russian has to pay premium cut around 20% from market price for their oil export, to compensate premium increase for buyers due to the sanctions.

When global oil reach $100+ per barel, Russian one sold around $80 per barel. This regardles the $ 65 cap. Shown eventough $65 cap increase some difficulty on transporting Russian Oil, but shipping insurance and Financial market sanctions are what matter most.

Western sanctions already reach the limit of what they can achieve toward Russian Global trade. What's left is try to sanctions other Players in mostly Global South on trading with Russia as effort to force them following this sanctions. That's what they are trying to by sanctions hundreds of companies and Individuals mostly in China, India, UAE, and others Global South. That's quite desperation move to risk enlarging trade war. Well let's see what Trump will do after this. He can either enlarging or deescalating this trade war (on matter of Russia trade).



First of all Russia doesn't need more Dollars or Euro, or Yen. Look what Russian central Banks increasing in their reserve lately, mostly gold and some Yuan. You can change any Yuan you toward Dollars on any amount, especially in Shanghai and Hong Kong market. They are very liquid and deep Financial market.

But still Russia doesn't need much dollars anymore, they don't trade much with USD or Euro, either their trade with local currency like Rupee in India, Yuan in China or Gold with Middle East or couple South East Asian market (directly or indirectly).

Again you always see on Westerners eyes, yes being cut off from Western market is hurting them but not make the end of days for Russian. Like I said Russian being sanctions by US, Euro and Allies, but not sanctions by others. Russian got western sanctions but not global sanctions (whatever western mainstream media and politicians try to picture).

As force them to use only Rupee for buying Indian stuff, perhaps as Rupee not internationaly traded as Yuan. However Yuan increasingly being accepted for Internasional trade, especially in Global South. But what matter as Feanor already put, what part it is that hurting Russia ?

This Russian author cites President Putin as saying the sanctions have effected Russia

 

[Capt. Ironpants]

This Russian author cites President Putin as saying the sanctions have effected Russia

I would like to see the actual video of Putin, or a reliable transcript of what he said. Konstantin Samoilov fled Russia to evade the 2022 mobilization, has been a longtime fierce critic of Putin, and now resides in Tashkent. That does not necessarily mean that what he says is untrue, or that he has put his own spin on whatever Putin actually said, but he does seem to have a axe to grind. Lots of people say lots of things on You Tube and other social media platforms, but it does not make them true or entirely true.

If Putin actually said this, it seems to me the Western media and the American State Department would be crowing about it. Yet, after searching, I cannot find any news article claiming he said all that. Do you have another source?

Mind you, I am not denying the sanctions had any effect or that Russia's economy has its troubles. I do wonder what Putin actually said.

 

[Ananda]

seems to me that a financialized economy would be less resilient to the sweeping sanctions imposed, and this might be one of the reasons behind their miscalculation. Is this correct, or am I not understanding something here? I've looked and looked, but never found anything exploring this question, so it might be a very stupid question.

In case of Russia, I believe the reason for that is because more on to:

1. Russia is holding big energy and commodities sources,
2. Russia also so far seems manage to conduct relative better import substitution especially for their domestic.

I have put it in this thread sometime ago, but put it here again to summarize it better.

India’s Fuel Exports to the EU Soar Due to Refining Loophole in Russia Sanctions | OilPrice.com

India has become the EU's top supplier of refined oil products, exploiting a loophole in EU sanctions against Russia and benefiting from discounted Russian crude oil.

www.google.com

The article talk about loop hole, is it really loop hole ? At this moment US already make Iran and Venezuela oils harder to get into market. Now West also try to make Russian oil harder to get to market. However for many Global South , it is simply unacceptable as that will make oil jump to more than $120 for long term. Thus many Asians buy oil refineries products from India and China, knowing they got discount prices from Russian crudes. Thus it is also means India and Chinese refineries can cut the prices of their refineries products. Turn out the Euro zones and I believe even some in US also take advantage of that.

Thus the sanctions hurt Russia? Off course it is, but it is hurting them not as much as Western politicians and think tanks hope for. Have put this on this thread for sometime, and some in here seems still think I believe the sanctions doesn't hurt Russia. The question is not whether the sanctions effect Russia, but more whether the sanctions effect Russia as big Western politicians hope for (when they create this sanctions). Latter one seems not happening until now, but it is effecting and hurting Russia nonetheless.

So back to your question of whether heavily financialized economy (and in this I presume economies that have big financial markets) will be more prones on sweeping sanctions. In my opinion more financialized economy, means more interdependence toward global financial markets. Thus yes in that sense they are more prones toward global market disturbance (as sanctions is one of that).

However do remember the main strength of Western Economies especially US and G7 is also their financial markets. That markets make their businesses able to raise capital and financing relatively easier and cheaper then others with smaller and less efficient capital market. More capital means more capabilities to growth, and more abilities to innovate (including RnD).

a side note, of course investment in R&D and infrastructure is reduced in a financialized economy.

I'm sorry, but I bit disagree on that. If you don't create RnD and tech development as far as market hope for, then they will punish you. That's a reason why Elon's company so far being reward by market and Boeing being punish. However what market also going to punish if you create excess capacities that markets deemed unsuited for the demand or more precise sustainable demand. Which means some of MIC only going to build capacities if they see sustainable demand deemed it necessary.

Market only think more on bottom line. Especially sustainable long term Bottom Line. The bean counters can cook the book for a year or two. However if it is not reflect on sustainable growth whether in capacities or qualities (thus tech development), market will punish you in the end.

That's big part what happened with Boeing. Their been counters can't cook the books for long if Boeing doesn't shown their own tech and capabilities development. So now Boeing (I used Boeing as example as it is used to be darling of the market), has to pay the prices and shown their investment can bring the promises capabilities and capacities improvement. That's where RnD investment matter.

 

[seaspear]

This footage also includes claims that automaker abtoba3 at 100 hundred billion of debt is nearing bankruptcy