Topic: Russia's economy is 'imploding' on export decline, economists claim - page 13. (Read 3697 times)

That one was a tit-for-tat measure. As a result of sanctions, there are restrictions on the import of microchips to Russia. And in retaliation, Russia banned the export of inert gases (they supply 30% of the global output), without which the microchip manufacturing can't proceed. There is already an acute shortage in the microchip market, and this latest move is going to make it much worse. Apart from Russia, Ukraine also used to be one of the leading suppliers of inert gases. But their output is also down, as a result of war.

As always, Putin and his mafiosi will keep on living the good life, but Russian people will suffer more and more. What strikes me the most is the food. What Russians eat is just terrible. All processed food sold in Russia would be just illegal in the EU, made with chemicals, and tasting awful, and if you go to the market in Saint Petersburg, they sell food from EU where you can read that the expiration date was 2 years ago. I'm really happy not to live there, and to be able to afford quality olive oil, and fresh organic food.

From my point of view, the more interesting news for today, although little noticed, is the restriction on the export of inert gases (argon, neon, etc.) from Russia. They seem to be used in the production of microelectronics or something. This is a non-obvious and rather strong lever of Russia's influence on the world economy.

I was reading in news that Gazprom has cut off gas supply to Netherlands and Germany. Moreover supply to shell will also be suspended as shell is refusing to pay in Russian national currecny. This conflict is now more about who will buy Russian oil and gas, little attention is paid to end this conflict.

^^^^ Gazprom has cut supplies only to Orsted (Danmark). They haven't cut any of their supplies to Germany or Netherlands. And in any case the exports to Danmark was minimal, as it is a very small country. Shell's contract to supply Russian gas to Germany stands cancelled, but it represents a small share of overall exports to that country. And as per the latest figures from Gazprom, they exported 61 billion cubic meters of gas to countries outside the former Soviet Union for the first five months of this year. This represents a decline of 27.6%, but due to the increased prices Gazprom has earned 10x more revenues when compared to the same period last year.

Well then. Here is the 6th package of sanctions and agreed. A particularly important section is the embargo on the purchase of Russian oil. No, of course this is not a total ban, it is a partial one (we will talk about this a little later, after other expected events). But even a partial embargo, and this is in "weight" terms, about $10 billion a year lost, is already good. This will act as a small cut tactic. This tactic allows without strong costs and effort, slowly but GUARANTEED, to bleed the enemy.
The second piece of news is from June 1, the suicide bomber, Gazprom Export, promises to stop gas supply, from June 1 (today), to the following countries - the Netherlands, Germany, Denmark.
The share of Russian gas in purchases of these countries:
Netherlands - up to 30%
Germany - approximately 50%
Denmark - below 10% (more precisely, I did not find the data). Denmark activates gas production in the North Sea.
The Netherlands and Denmark have active LNGs.
Yes, Germany will probably be the most difficult of all, but it's better than financing Russian terrorists and fascists. I am sure, rather quickly (no, not days of course), these countries will receive alternative gas, smoothly replacing supplies from Russia. Even now, Russia will start receiving less money to finance international terrorism, and in 1-2 years, this flow will dry up to almost 0 levels. No, Russia will continue to sell gas to China and India, but this will be a price at the cost level, i.e. will pay back, at best, only production, and there will be no more talk about profit. The main thing is that the process of refusing hydrocarbons from the hands of terrorists has been launched and is gaining momentum!

Those were because Russia was doing their countermeasure on all those sanctions, there is no way that they are going to sit still while wagering war on Ukraine doing nothing on their economy aspect. For now, it might not seems like it is taking any effect on their economy but there is no guarantee that their countermeasure will be effective for years as I expect that all those sanctions will last for atleast 2 years

I don't think that Russia is in much better position, it's just that their government doesn't really care how an average Russian citizen lives so maybe they are in better position as they don't have to worry about public opinion.


Sanctions won't work due simple reason that Putin doesn't give a fuck about his own people, and it's not like they can overthrown him on elections like in the west so in the end it's just a waste of time(and money). After all, we saw how sanctions worked in North Korea, Cuba etc. And it's not like Russians don't have a history of dictators making their life miserable so for them that's business as usual.

The war actually took another twist. Now US is looking like coming out to show clear sympathy for Ukraine and giving out more dangerous weapon. Who knows what Russia has in store in terms of weapons, the latter days will determine how it will all happen as Putin clearly warned biden to stay off. Russia however has clearly shown that survival is possible despite severe sanctions.

Another way of looking at it is the EU exports to Russia was cut by 50% which is also visible as inflation and soaring prices all around EU.

What crisis? You should seriously stop reading propaganda specially from BBC

There has been inflation in Iran but not a crisis and the inflation also had very little to do with sanctions. It was because of an incompetent government printing money non-stop. Otherwise prices were mostly stable for the past year ever since the previous president's term ended and new one took office. That is despite the increasing sanctions against Iran.

IMF puts Iran's economy as 20th largest economy, Iran's GDP is the 17th biggest in the world. And both of these are excluding the billions of dollars of trade that Iran doesn't publicize due to sanctions!
On top of that as the country with the second largest gas reserves and large oil supplies with the soaring energy prices the country's revenue has increased significantly.

I have already written about how Russia is in a much better position because it was preparing for war and sanctions even before it started tearing Ukraine apart by attacking Crimea and supporting uprisings in Ukrainian regions along its western borders. It's like playing poker games where you know all the cards of your opponents and you can only lose money if you're a complete fool.

Even if sanctions work, no government in Russia, if we look through history, cared too much for the common man and he has always been a collateral victim for some major goals. In other words, Russia has enough cannon fodder to be able to fight for a very long time, whether 50 000 or 500 000 Russian soldiers die for Moscow doesn't matter anyway - most of the soldiers are from poor and rural parts of Russia anyway.

In a deceived world the economy is failing even when the President & Russia currency show otherwise.
I thought a characteristics of a healthy/strong economy is Strong currency or is this nolonger correct?

Anyway, I'm not surprised as alot used to believe that Russia was being defeated in the war against globalist in Ukraine.

This war has actually exposed Russian economy as raw material based and this has not helped them this time. They are relying on China for buying of oil and gas and to get finished product from them. This is not healthy for an economy. The amount of dependency that Russia will witness after this war will further collapse the economy because when you can't produce 60% percentage of what you use to an extent then you will have to rely on other countries then inflation will set as there won't be foreign reserves.

I don't think Russian economy will be destroyed just because of western sanctions, maybe in other respects I can agree with you like sports, tourists or others, but from an economic point, I doubt that Russia will be destroyed, right now the EU is imposing sanctions on exports of gas, oil and minerals from Russia, but did you know that in fact it could backfire for EU countries?
Russia the third largest country as a producer of gas, oil and minerals for European countries and if they stopped shipping gas, oil and minerals wouldn't it make it difficult for the industry in the European continent to run?
I think as a country with oil and gas producers of course it is not difficult for Russia to find other importers besides China and I don't think China will be able to dictate to Russia to sell its gas and oil at cheap prices because it is clear that it has violated the mutual agreement later, even at the Union Summit Europe yesterday in Brussels, it seems that the cohesiveness of the European Union in carrying out sanctions against Russia has begun to crumble, even Hungary, Slovakia and the Czech Republic have begun to reject the sanctions because of their dependence on Russian oil and gas so far.

It's worth adding that somehow, this was easy. What are Russian exports besides oil and gas? There's nothing Russian-made that I'd like to buy. Even Swedish or Polish vodka is better than the Russian one. Russia has a border with China, South Korea, countries which make plenty of desirable products, but Russia hasn't managed to make a single one.

If Russia had chosen to develop its industry instead of relying on raw materials, it would not be in the mess it's in.

The western sanctions will hit the Russian economy in the long term, the Russian oil prices are 30% lower than the western oil prices.
Russia will have to sell more oil, gas and food to China, but the prices will be low, so the export revenue won't bring bigger profits for the Russian economy. The biggest negative effect of the sanctions will be the technological deterioration of the Russian economy, which will happen slowly, in a matter of several years.
Nobody is denying the fact, that the western sanctions will hit the western economies ae well. This is the side effect of globalization. The countries and their economies have become codependent on each other. The sanctions will end the state of codependency and create a more fragmented and divided global economy.

I believe if Russia's economy fails more and more, there might be a Black Swan that's getting itself ready to emerge, and show itself to everyone's surprise/shock. Will it be World War III? I don't know. Naseem Taleb didn't use the expression Black Swan to define some that would predictable. If it's indeed to be a Black Swan, we will never know, nor will it be predicted. We can guess though.

Of course, the wish of satan was to ruin the economy with the sanctions to starve them of fund, see them suffer and possibly protest against Putin/government (for regime change). Well, I'm convinced the opposite happened as the sanctions heavily backfired as was predicted before they began. The strength of Russia ruble is one of important proof to this, the increase in income for Russians, increase in wheat productions, etc.
I see the economy doing even better as Russia Influence expands globally.

Just a correction: The sanctions have been imposed by more than 20 countries. I do not debate your argument in the sense that US and some European nations have a bad track record in regards to peace.

It's easier said than done! When the import of a country is down, it means two things -

1. The country is on the way of becoming independent
2. Their forex reserves are saved from being depleted faster

These are the indicators of a strong economy and not a weak one. Russia has been supplying around 14% of world's oil and gas requirement since long. So it is not very easy to make them bend down in the face of sanctions.

Most hilariously when the sanctions have been imposed by a country responsible for most number of wars in the history of humankind.

The world must end of dollar dominance which gives US an upper hand on almost everything.