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The notion that a GDP decline not nearly as bad as expected is “pessimistic” shows just how excited the Western media and governments were about the possibility of Russia’s economic demise.
Written by Drago Bosnic, independent geopolitical and military analyst
After the United States and the European Union imposed sanctions on Russia, the most comprehensive and unprecedented economic attack in recent history, Western economists and the media parroted the same talking points of their political elites – the Russian economy was finished. The ruble was in free fall, at least half of Russia’s massive foreign exchange reserves were frozen, estimated at around $300-350 billion in assets now effectively stolen by the West, while Western financial institutions and banking systems were starting to cut Russia off, hampering trade, even with third parties.
Western leaders boasted about how they made it all happen at the push of a button and that Russia was now faced with the prospect of an economic collapse. The Moscow Stock Exchange stopped trading and by early March, it certainly seemed Russia was about to go back to the troublesome 1990s. Self-styled economic experts were making predictions and boastful prognoses of how much the Russian economy would contract by year’s end. The initial number of 30% soon turned into 25, then 22, then 17 and in the end 14 percent. Now, that number is projected to go even lower.
How is it possible that the Russian economy is so resilient? Isn’t the country just “a gas station with nukes”? Isn’t its economy the size of Spain’s? Isn’t Russia a country with no culture, no money, no laws, no future, in a state of perpetual collapse, inhabited by a deeply depressed populace with the sole wish to leave, but prevented by the “evil Kremlin”? This is precisely the image that the mainstream media have been trying to create. The spiteful portrayal of anything even remotely connected to Russia has been the norm for quite some time now.
This has been preventing the establishment of normal relations between Russia and the West for decades, despite Russia’s efforts, oftentimes at its own expense, as we were able to see during decades of NATO’s eastward expansion, made possible only thanks to Moscow’s willingness to dismantle not just its own NATO-like alliance with Eastern European countries, but also the significantly larger and more powerful USSR. All for nothing, as is evident now, since the political West has exposed its true face completely by treating Russia even worse than the USSR during the Cold War.
However, there are still some Western mainstream media decent enough to let occasional slivers of truth out through all the mindless Russophobic clutter. In its May 7th release, the Economist, a somewhat still reputable London-based publication, stated that “Russia’s economy is back on its feet”. In early April, the weekly pointed to preliminary evidence that the Russian economy was defying predictions of collapse, despite unprecedented sanctions. Recent data further support this view. Helped along by capital controls and high interest rates, the ruble is now more valuable than it was before Russia’s special military operation. Russia also continued with payments of its foreign-currency bonds.
“The real economy is surprisingly resilient too. True, Russian consumer prices have risen by more than 10% since the beginning of the year, as the rouble’s initial depreciation made imports more expensive and many Western companies pulled out, reducing supply. The number of firms late on their wage payments seems to be growing,” the report states.
“But ‘real-time’ measures of Russian economic activity are largely holding up. Total electricity consumption has fallen only a smidge. After a lull in March, Russians seem to be spending fairly freely on cafés, bars and restaurants, according to a spending tracker run by Sberbank, Russia’s largest bank. On April 29th the central bank lowered its key interest rate from 17% to 14%, a sign that a financial panic which began in February has eased slightly. The Russian economy is undoubtedly shrinking, but some economists’ predictions of a GDP decline of up to 15% this year are starting to look pessimistic,” the report adds.
The notion that a GDP decline not nearly as bad as expected is “pessimistic” shows just how excited the Western media and governments were about the possibility of Russia’s economic demise, which in turn was supposed to cause a regime-change in Moscow, bringing about the 1990s-style enslavement of the country. The fact that this failed to materialize seems rather frustrating to the political West, but it’s still nothing compared to the absolutely enraging notion that Russia’s economy is holding together with relative ease, while Western economies are suffering significantly more than expected as sanctions backfire.
“Even before the invasion Russia was a fairly closed economy, limiting sanctions’ bite. But the biggest reason for the economy’s resilience relates to fossil fuels. Since the invasion Russia has exported at least $65bn-worth of fossil fuels via shipments and pipelines, suggests the Centre for Research on Energy and Clean Air, a think-tank in Finland. In the first quarter of 2022 the government’s revenues from hydrocarbons rose by over 80% year on year. On May 4th the European Commission proposed a ban on imports of all Russian oil that would come into full force by the end of the year. Until then, expect the Russian economy to continue to trundle along,” the report concludes.
The claim that Russia is doing well only because of the fossil fuels price hike serves as an excuse and a supposed confirmation that Russia is still allegedly “a second-class economy”. However, this notion ignores the fact that the price hikes are a result of multiple factors, one being the Western sanctions which are disrupting financial transactions and supply lines. Still, it’s naive to expect that the problems resulting from the failed economic siege of Russia could be resolved by lifting the sanctions. Russia simply has no reason to trust the West. Even in the case Russia’s stolen foreign exchange reserves are unfrozen, it would take years or even decades to restore the trust in Western financial institutions.
It is not higher interest rates and capital controls that helped the ruble but forcing commodities to be paid in rubles, while expanding their gold reserves at a fixed ruble price, setting a gold-ruble link.
Who do you mean by the word Orcrainians?
You fully know that ukrainians are white ISIS. The original orcs were ISIS terrorists invading Syria.
Orcrainians is just my word of putting the two together.
Russia is issuing 25 rubles in silver this year.
It will be fun to see how the paper dollar reacts to that.
Yes the rouble has done well….. but it’s not just about the rouble. The fact is, and some people find this strange is that Russia had developed economically on a path closer to the US than the EU. The entry point to business in terms of opportunity was more like America (Old days – capitalism – not rotten capitalism – obviously bureaucracy is another matter). This fact has made the economy not only far more resilient, but also ready for any further developmental opportunities. I assure you the comfortable are still enjoying Dubai. Removing all IP rights for western companies, in response to the theft of reserves, would help that free business environment even more. What we are seeing is the creation of a multipolar set up and Russia is capable of exploiting that opportunity, not just through state actions, but individual independent actions of their business community.
THE PETRODOLLAR
This war is about the petrodollar at this point. Lose the petrodollar, lose the war. Lose the war, the US becomes a failed state. A gutted version of its former self. Like 1990s Russia.
It’s payback game…
Indeed. All the US aggressive imperialism of the last decade have been about that exactly: Libya was destroyed because it tried to create a new currency, Iran because it sells oil in other currencies than the USD, Venezuela pretty much the same (petro cryptocurrency particularly), Iraq was about controlling not just Iraqi oil but primarily Saudi and other Arab one (by forcing them to accept the USA as their military and political sole protector), and of course all the NATO eastward expansion (Maidan putsch included) had to do with forcing Russia into submission and eventually butchering the Eurasian country somehow.
The USA could live without an oil-backed currency? They could indeed but they could not import so much from around the world, and their economy and the wealth of their oligarchs would thus collapse, which is something they’re not going to accept unless they have no choice whatsoever, because it would surely lead to a socialist revolution (not just in the USA but in Europe as well). That’s the main difference with the collapse of the USSR: once the Western capitalist oligarchies collapse, can’t deliver even crumbs anymore (and that’s happening as we speak), it can only go the way of the old USSR to some extent (different because the bolshevik model revolutions were of agrarian basis, the West has a fully developed proletariat and almost no peasantry).
I agree that the war is about the petro dollar. I also believe that Russia has outplayed the USA so far in regards to the economic war. I’m beginning to believe that the special military operation is just a side show to keep the economic war going. Russia’s allies in the economic war are very happy right now. OPEC+ is selling oil and gas at very high prices and China is buying at a steep discount. Everyone is winning and the costs of the war and energy are draining the west.
That being said the USA isn’t going to “collapse”. We have a lot of debt but that doesn’t matter. We have a lot of assets too. The nature of the US debt looks like this: The US owes 9 trillion to its own Federal Reserve. The FED holds the debt collects the interest deducts a small fee to cover its costs and then repays the debt payment back to the US treasury. So its 9 trillion we don’t pay on. 5 trillion in us debt is owned by the Social security administration. SSA pays cash benefits to our old people. If the SSA didn’t have any money at all in US treasury debt it wouldn’t matter. Every wage earner pays 7.65% of their earnings up to a cap of $135,000 a year in earnings. After they hit the cap they stop paying into social security. Their employer matches the amount they pay into the social security fund. If we wanted to keep paying promised benefits to the elderly we would just remove the earnings cap on Social Security for top earners and keep paying benefits out. We owe 7 trillion to foreign countries. Have you ever seen what happens to a bonds value when interest rates go up? The marketable value of the bond goes down. The par value stays the same but who wants to hold a bond to maturity that has a 2% coupon rate in an environment with 8-9% inflation. Which means we could repurchase our own debt on the open market for far less than the notional amounts on the bonds if we needed too. The remaining debt is held by US citizens, banks, insurance companies and pension funds. So the debt payments from the US gov is just money in the hands of US citizens.
Here’s a list of US assets off the top of my head. 330 million people, 40% of which have a college degree. Huge reserves of oil. Huge amounts of agricultural land. Huge amounts of infrastructure. An absolutely huge military. An absolutely huge navy. A free press (screw social media btw). Huge amounts of guns in the hands of the public and very little dissent amongst the population. There will always be crime and people always bitch but that’s not militarized dissent. Give everybody in China the “right to bear arms” and watch what happens. Cities that provide the gateway to base and carnal human desires like Hollywood, Las Vegas and New York. For 250 years we haven’t had an interruption to our government and we’ve grown in power the entire time. The US dollar is the global reserve currency. Our Capital markets are absolutely massive. The US government writes and enforces laws all over the world through proxies, NGOs, puppet states and charter organizations like the UN. 30 million of the most polite people in the world living in Canada on our Northern Border. Canada is the second largest country in the world and our largest trading partner. They have tons of oil and gas too. They all speak English and if you think they are anything but America junior you’re out of your mind. Mexico to the south growing huge amounts of crops and sending it to the USA and NAFTA binding it all together. Huge amounts of assets in the hands of the American people. 10% of the US population is a millionaire. 25% of the US population owns their own home outright(no debt). We commute to work in trucks that could tow a howitzer. Every garage is full of every hand and power tool imaginable. And the glorious power of television keeps everyone singing the same happy song we’ve been singing since 1950.
The USA is the most powerful entity the world has ever known and is also one of the most free. All Empires have their intrigues but this post isn’t about morality it is about Imperial collapse. I don’t see the collapse of the USA at any point this century even if the nice shiny polish is a little thin in places.
Some of the “assets” you list are actually liabilities. What good is a college degree that doesn’t teach you an actual skill and for which you now owe more than you will ever be able to pay in your lifetime ? Thats a liability, not an asset. The cities you list, liabilities, not assets. Huge oil reserves are not an asset until the government allows us to access them and even then, if the profits go to huge international corporations and corrupt politicians how is that a benefit to actual US citizens? The global reserve currency, our capitol markets and our military are all the things that the article talks about that are changing. 10 % of the US population are millionaries? So f***ing what. Lots of millionaires in zimbabwe and 1920s germany also. My truck could tow a howitzer too, if only I could afford to put fuel in it !
Remember we are talking about public assets and not personal assets though. A college degree for something stupid is a bad personal finance decision it doesn’t affect the US gov. They just collect interest on the debt. Same thing with a truck that you can’t afford to drive. (I hope that’s not true btw) But the material wealth of the truck (engine, cab, towing capacity) still exist as an asset to be used.
I understand your hyperbole on Weimar and Zimbabwe. But this is USD $1,000,000. How much is that restaurant meal with a nice looking waitress, a burger, fries and a beer? $25 with a tip. How many calories in that meal? Almost a days worth. $1,000,000 feeds you for a lot of days and 10% of the population has that kind of money.
I agree we have silly regulations but I also think why use up our own oil when we can print money and use everyone else’s? Oil isn’t going anywhere, sure we could go green but then we would just fight wars over lithium.
The cities I chose for cultural significance. How many Chinese and Russian oligarchs go to Las Vegas to strut their stuff. How many global citizens watch Hollyweird movies or dream of shopping on 5th Ave. Soft Power like that is hard to defeat as well. But I could have listed Dallas or Houston with huge influence in refining and oil markets. San Francisco’s tech. Seattle’s production or Miami’s pull in the Caribbean. Remember in WW1 the Germans were just fighting for a “place in the sun”. The US has tons of those.
The wealth (physical materials and places) in the USA are absolutely tremendous. That’s why the country is so strong. Look at the G20 and you will notice that yes they are some of the biggest economies in the world but by and large they are also mostly the largest in terms of territory as well. The USA is the third largest territory of any country. But unlike Russia and Canada the whole thing is prime real estate. The USA might have its hiccups but unless someone comes and physically removes us from this land we will always be one of the most successful peoples on the planet.
So many Americans are millionaires because their house is worth $750k. The same house that was worth $250k 4 years ago and could be worth $250k a year from now. Same goes for stocks, bitcoin, etc. You have a mortgage of $200k at 3%, you pay $6000 a year in interest and another $6000 in property taxes on a house appraised at $200k. That is manageable for you. But supposing you list your house at $750k. The local appraiser pays you a visit, appraises the house at $600k. Next year whoever owns the house is going to pay $18,000 in taxes. Whoever is thinking of buying your house is going to have to sign up for a 6% adjustable rate loan, $15,000 in interest and the probability of paying twice that in a year or 3. Your house costs you $12,000 a year to live in it. Whoever buys it is going to pay $33,000 a year to live in it and potentially nearly $50,000 a year. So, Mr. Millionaire, you really think your paper fortune is real?
You’re sooo delusional and suffer from the self righteous arrogance that assumes some sort of uniqueness or exceptionalism. The same flawed mindset that empires suffer from right before they crumble.
Well written post but it is tainted by some American Exceptionalism propaganda, you also mention no interruption to government for too many years. Many historians of all different persuasions would argue the American Civil War was a large interruption. While you mention some things that bring back fond memories of growing up under the pines of North Georgia it feeds into the past era of American Exceptionalism. Large trucks, hand tools in the garage, an oblong box in the corner of the room constantly parroting oligarch propaganda are things of the past brother. China is building massive dams with very little human input through artificial intelligence, the dozers, trucks, and other heavy equipment are all unmanned. China is 3D printing retractable bridges with concrete that are in better condition than the neglected US infrastructure, many of which were built by undocumented immigrants that cut corners or corrupt contractors(using some saltwater to mix concrete in Florida/Miami, for example). China and Russia are the only two countries with the current technological ability and manufacturing prowess to build infrastructure on the moon. You also make false assumptions about China, it’s always interesting and a little funny to dive back in the US propaganda hole and listen to Americans talk, no offense to you personally. The Chinese wouldn’t ask for arms, they trust their government quite well to protect them. They have a much different mindset than Americans, for instance – “Don’t make a fuss about a world war. At most, people die… Half the population wiped out – this happened quite a few times in Chinese history… It’s best if half the population is left, next best one-third.” Compare the American experiment of 250 or so years to the thousands of years of Chinese culture and collective thought, you talk about guns in every hand but the Chinese were the first to develop gunpowder? It’s just a more civilized society, the crime rate is extremely low, their GDP expansion and real economic growth have been unmatched since the foreign meddling was kicked out, American conservatives would really be blown away visiting a coastal city in China and then comparing it to a US city(where 80% of the US population lives – another mischaracterization in your posts about the vast amounts of farmland is that they are really owned by oligarchs, technocrat Bill Gates is the largest owner of farmland is in US). These cities full of drugs, crime, young people too busy having fun to learn a skill of the future and work for something FOR THEIR COUNTRY. I would challenge you to go out for a night and ask every under 30 for their opinion on the US government, I think you’d be quite surprised. And a huge amount of assets in the hands of the people? One percent of the population owns forty percent of the wealth, get off the Kool-Aid, for the sake of the world. I could go on but to get to the point the British, another relatively young imperial state, also thought the sun would never set on the British empire. Americans are starting to figure out how they’ve been robbed with their massive collective wealth, now that the dynamics of the world are changing this will become much more apparent as prices rise and discontent sets in. The fissures in American society of the poor and downtrodden will not be ignored much longer, the last violent attempt on the capitol wasn’t socialists or communists but extremely brainwashed capitalists. This underscores the dire situation American domestic politics are in. Sorry Joe, this ain’t temporary. And lastly for the sake of the world please never mention the crime ridden shitholes of NY, Las Vegas, or Hollywood in comparison with Macau, Beijing, Shanghai, Hong Kong.
I liked your post and upvoted it but I’m curious if you haven’t wandered into a logical fallacy? Tu quo que (And you what?) And I fear that I may soon here wander into the same fallacy but I will try.
I knew the Civil war would get mentioned in rebuttal but we have to remember which side won. Wars are used to advance the state (like Russia now) and the North the Federal side definitely advanced during that time.
China has made massive strides since Nixon and Kissinger decided it should. When Nixon landed on AF1 thousands of Chinese had swept the runway of snow with brooms before he landed. Remember Ross Perot? His argument in (1991?) While running for president was stop offshoring jobs and industry but the US still did it. The USA has been subsidizing China for decades.
Here’s my Tu Quo Que. China is a tremendous builder like you mentioned but product quality in America has nothing to do with it. I seem to remember poisoned Chinese dog food and Drywall coming in a couple of years ago. The Chinese might not want to own guns (1.3 billion people is a lot to speculate on) but I don’t think the Chinese Government would give a try to allowing it. Chinese cities are huge bigger than New York and also filled with pollution. Crime (illegality) is relative depending on who makes the laws. 1 billion people in the West believe government censorship is a crime. How long would the CCP last without censorship? The fact they haven’t tried to have a free press means the CCP doesn’t think that endeavor would go well. Oligarchs in the West own all the farmland? Who owns Chinese farmland? Where is Jack Ma or those dead Russian Oligarchs. People under 30 have soft opinions. Time is the teacher and they haven’t had much of it to spend yet.
Though I don’t see your societal collapse narrative. Crime,yep. Poverty,yep. Societal Collapse, no. Who was the super rich American that said “you can always pay half of the poor to kill the other half? It worked for Caesar, Brutus and Pompey. What did Jesus say “for the poor you will always have with you”. People don’t fight to the death because credit card interest rates went from 32% to 35%. Nor do they over mask mandates or housing scarcity. War is about logistics and an angry poor person don’t got no logistics. Maybe 1 in a million angry poor people go kill 5-10 people at a mall or a wal mart. That’s it. Americans accept it but it makes great headlines.
Every Saturday I see thousands of Kids playing soccer, football and baseball, brought to the field by loving families in minivans. They speak the same language as me, listen to the same music, they are all trying to make as many US dollars as possible. I look out and see 330,000,000 people just like me and I am a very long ways away from collapse.
And lastly for the sake of the world please never mention the crime ridden shitholes of NY, Las Vegas, or Hollywood.
You totally won on this point 😂
I think people in the US view the evolution of the government differently because it’s still taught in American schools as a respectable and continuous republic, personally I consider the postcolonial, the postbellum, and postwar US governments all distinctly different executions of governance than even the current Citizens United form. The US subsidizing China is one of the crimes of the US oligarchy and why Americans should be furious, from my view they have destroyed America’s future potential to remain a superpower but many people will see this differently as with the investment markets. Time will tell. The point with the farmland issues is one of the most subtle tricks of US propaganda, as an oligarchy that functions with politicians pursuing the policies of the corporate magnates it’s very clever how they spin the private ownership tales. In reality all the major industries of the US are owned de-facto by the oligarchs with ties to the government, they pursue the same goals. So there are only minor differences between the official ownership of farmland by the Chinese state and unspoken ownership by the US government. There are substandard and product recalls with major manufacturers as well in USA, not to mention all the rotting infrastructure and lead pipes poisoning Americans daily. If America was governed with equal competence to China the massive per capita wealth of the US would be better spent improving America, not invading the Middle East for the benefit of the few. I consider this another crime against the people of the US as well. While those are nice things to experience and I’m glad you enjoy the picturesque landscape of suburban America I would implore you to learn more about how that was attained with regards to external peoples and also the internal demographics of the US. The cities are starting to figure this out and are a mess, the George Floyd protests and US Capitol riots are just the beginning of what’s to come from my perspective. More power to them though, I’m down to run up on those crackers in their city halls too! 😝
I think people in the US view the evolution of the government differently because it’s still taught in American schools as a respectable and continuous republic, personally I consider the postcolonial, the postbellum, and postwar US governments all distinctly different executions of governance than even the current Citizens United form. I like what you wrote here. It’s a very intelligent division of timeline I hadn’t heard before. I play the same thing out sometimes in respect to the Roman republic. Also, I find your discussion of the post Citizen United Form of government (c.u.n.t.s.) to be persuasive. I think throughout all forms of government we find corruption to be human nature. I hope our little experience in America survives a few more generations past my time. It will definitely require people like you to do so.
If America was governed with equal competence to China
Remember a republic bumbles forward. It ensures that we don’t have any great leaps forward. And it ensures that we don’t have any “Great Leaps Forward”.
You are correct. New York, Detroit, Chicago, LA are all shitholes. Even the smaller cities. For example, today 21 people were shot in a brawl in Milwaukee over a basketball game.
You are delusional and SO out of touch with reality. You’re living in the husk of the old system, the system that is currently beginning a transition.
I might wait around for climate change to rain on your parade.
Do you smoke hopium? Or copium?
https://www.usdebtclock.org/
This is what happens when you are a nation of drug addled crack heads, dumb from birth and weaned on poisoned apple pie hubris run by mutton headed Pentacon ghouls.
Meanwhile….tick tick tick tick until Slumville implode$
Russia just stop diplomatic relations with Israeli NAZIs and then see the effect that the NATO states coming to their knees or not. Russia allies with Israel mean Russia allies with NATO because Israel is a dirty project of Europe.
They appear to be doing more damage the their own and EU economies, let’s see who survives this
Very interesting to see which people will handles these damages in France. And who will not.
But that’s partly intentional, even if extremely decadent and “playing with fire”. The slowly collapsing US Empire needs colonies and, if the former colonies are getting autonomous and often alligning with the rising star China (which is also capitalist and imperialist its own way), Europe and to lesser extent the US working class is going to become its new colony (internal colonialism is a thing, China and India among others do it, the USA also does especially towards minorities).
The West, understood as NATO Empire, won’t survive this: social collapse and (eventually) revolution will ensue, no doubt.
We out here sucking dick and drinking toxic waste Flint, Michigan water. I’m sure the U.S government has our best interests at heart.
All here below seemes to forget why we do this gamechange being ready to pay the price.
I come here to the comments section just to down vote the loser comments without reading them.
My suggestion to all the righteous people on here: don’t read the drivel, don’t respond and feed the trolls, down vote…….
I only read half your comment, then down voted it.
There are fundamental flaws in “Economic Science” (accountants’ pseudoscience) itself, just for reason of being monetarist: exchange-value is the only thing considered or almost so, while use-value is neglected, when it’s clear it’s not the same a ton of grain or a shipment of oil, which are fundamental commodities hard to prescind of, than a Kandinksy or nominal money in the Cayman Islands, which only have speculative value but may be worth much more in the “free market” (until they don’t).
Ultimately it’s the potatoes and trucks to carry those potatoes from farm to city, which an economy make. The Kandinsky and the posh walls they hang from, money even if not properly managed, are not the economy, only a side effect.
This is what Russia has demonstrated, including that GDP(PPP) is much more relevant than US-centric nominal GDP based on carefully manipulated (by all sides, mind you) currency exchange values. This is particularly true for large countries with a diversified economy.
This conflict and the previous two years of pandemist scare are also dispelling the postmodern belief of the “economy of services” being of any significant worth. What matters is “potatoes” (primary sector) and “trucks” (secondary sector, transport/distribution itself is considered a service, arguably the only one that really matters, but making trucks and other machinery is industry).
A year ago, I considered industrial production (PPP) as a possible more reliable reference for economic might, and Russia stood at the level of Germany and only behind (in this order) of China, the USA, India and Japan… and trailed by a surprisingly mighty Indonesia. Other surprises are that Mexico, Turkey and Iran have similar industrial production in terms of value (PPP) to France, Britain or Italy, while Saudi Arabia is stronger and almost as industrialized as South Korea rather. I digress a bit here but I believe it does illustrate the realignment of real economic power towards what used to be the global periphery in the last decades, not just to China.
In the case of Russia the primary sector is even more massive, I was reading yesterday that it may be producing as much oil as Saudi Arabia, and that’s not considering even its main asset: natural gas. So in a sense fighting Russia is much like fighting against the OPEC in the good old days of this organization, with the difference that Russia (unlike the boot-licking Saudis) is going to assert itself and not bow to what amounts to systematic foreign aggression with the declared goal of destroying and looting it.
Agreed… Purchasing Power Parity is another fraudulent technique used by the Western countries to undermine many other countries.
For example, the IMF loans money to a small country to attract “foreign Investment” under the condition they privatize the energy market and devalue their local currency. THIS IS FORCED ON THE COUNTRY… it is made a condition for the loan.
After the forced devaluation, Purchasing Power Parity comes into play. The whole economy of that small country shrinks by whatever number the IMF decides as the ultimate exchange rate. Hence the economy shrinks. Energy becomes more expensive and the local population become poor.
This method has been used by the International Monetary fund for decades against Latin American countries and Africa.. It is now being used in a few countries like Ukraine.
I don’t understand why you say that PPP is a “fraudulent technique”, much less joined in the same sentence with “agreed”. My point was that PPP seems more real, at least for large countries with a diversified economy, than nominal values of GDP or, in my comment, industrial production.
Agreed that the IMF is a terrorist mafia at the service of neocolonialist oligarchies but PPP is a mere alternative measure of actual value which actually seems to reflect better the real economy. The nominal GDP is like that of Spain but the GDP (PPP) of Russia is much larger, more similar to that of Germany instead. This last is much more in agreement with the actual might of Russia, so PPP seems better, a more accurate measure of actual productive worth.
Another issue that I did not touch is how the GDP is calculated as sum of all transactions, meaning that trading goods or services counts as “production” even if nothing at all is produced. As some old example explained: a doll produced in China with a 3$ price tag and sold in California for 10$, increases the GDP of China by 3$ and that of the USA by 7$. This makes no sense to me but is the official doctrine for the capitalist accountancy called “Economic Science”. Production is production, not sales. We can’t really measure actual production, real economy like that, sales are NOT PRODUCTION (farming, mining, industry and arguably transportation are but definitely no sales).
RU imports from China etc. are crashing.
The economist jew nazi fiat sheizen is going to digitalized is anus for a better world
only if everybody digitalized is anus several times the economist will survived but in a world of stupid robotz…..good luck with that Stupid Parzites !!!!
Nazis jews dont die with covid just with a big bomb in the anus !!!!
“Even in the case Russia’s stolen foreign exchange reserves are unfrozen, it would take years or even decades to restore the trust in Western financial institutions”
Nobody trusts the West now…. watch how nations slowly put their money in other places. The future is not good to the West. Now I understand the reason. Would you put your wealth in a bank that can steal (freeze) your wealth? Is it not better to bury your wealth in your backyard?
Why do people put money in banks? FOR SAFE KEEPING…. now if the bank becomes the bandit, will you save money in the bank?
The West has destroyed their banking system. All China and India need to do now is to allow other countries to save money in Chinese banks with ease.
The digital Yuan will enable a lot of countries save wealth in a country that would outproduce the West in Electric cars, consumer electronics, cloths, food etc.
Why save in England or the USA when they can freeze your funds overnight?
West did great in ruining the standard of living of their own people, while americans are grinning.
What is the news here, it is as it always was since we live in the 1930ies with so called “Nazis” then there is no significant trade or air traffic to care for either. Russia is a soviet communism economic system, so what are the complains about now?
Russia is issuing 25 rubles in silver this year.
It will be fun to see how the paper dollar reacts to that.
Was it Sergei Glasiev who promoted it? He works closely with Hugo Salinas Price.
Russia is ranked 2nd in cobalt production,2nd in titanium,4th in silver,2nd in gold,2nd in vandium,2nd in magnesium,7th in copper, 8th in zinc, 1st in palladium, 3rd in nickel, 2nd in platnium, 2nd in tungsten, 1st sometimes 2nd in iridium,2nd in mica, 5th in selenium, 7th in indium, 3rd in soda ash, 6th is peat, 1st in asbestos, 4th in vermiculite,4th in arsenic trioxide,3rd in ammonia,1st in polonium, 2nd in rhodium,6th in uranium,8th in cadnium,4th in boron,6th in graphite,4th in bismuth,5th in crude iodine,5th in chromate,11th in lead,8th in gypsum,7th in bauxite,3rd in antimony,8th in molybdenum,2nd in potash, 2nd in aluminum, 5th sometimes 4th in steel, 3rd largest wheat producer, 2nd sunflower oil,1st diamond mining,1st barley,6th in liquid natural gas exports,3rd largest crude oil,2nd largest exporter of arms(20% world market share)
if US Empire economists believed the sanctions would weaken Russia revative to the Empire, then the Empire’s Economists are rubbish at Economics. The world need do nothing more than ensure the Empire cannot continue thieving resources .. the Empire will then implode due to it’s inability to distinguish between Fantasy Economics and Reality Economics.