This shows Putin got the costs of aggression wrong

justdimin

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Quote from: Wexnident on March 01, 2022, 05:37:46 AM

Quote from: el kaka22 on March 01, 2022, 12:53:02 AM

I do not understand how Russia could still stand, I was expecting 1 dollar to become 500+ ruble by this time. Putin will use this wrongfully to show how "strong" they are, I am afraid it will end up badly.

I think it already ended up badly? Like I was sure Putin was trusting of how strong their army was, but well, results show that it really wasn't any stronger. From what I read about how it was described, it was something like a paper tiger. Putin probably overestimated his side and underestimated the other side. Pretty sure this war has brought nothing but losses to Putin's side probably contrary to his earlier expectations for the results of his assault.

Russia is probably gonna experience a huge shift after this, and most likely in a negative way.

I am guessing that Putin and Russia didn't send their best soldiers and equipment just yet. I really hope that Ukraine wins this war, but the longer it gets, the more serious soldiers are on the way.

The first ones that were sent ended up with food that expired in 2015 (there was a video of it) and that is not really the type of situation you would be in if you cared about the war. They fired some missiles, they killed some people, they took the lands they wanted to take and now they are going to just relax and keep the situation as it is. The thing they will want would be asking the new two lands and crime to be accepted and they will leave.

Everyday they are not given that, there is a whole miles long army marching everyday, one day they will eventually arrive and that is when things will go ugly. I am hoping that I am wrong, otherwise it will be nasty war all over again, and what we have seen so far would be like a street fight compared to what's coming.

gantez

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Quote from: NeuroticFish on March 01, 2022, 06:37:55 AM

China has started to evacuate their people from Ukraine only today.
That may mean that Putin has told China that the war will not take longer than 4-5 days.

Obviously this is true because if you look at Putin's Army initially, they were taking it calmly hoping that Ukraine will fearly surrender but they are now shocked and getting frustrated. That made them to start firing on civilians and destroying residential homes yet they sent. And yesterday, satellite images from US is showing lots of military tanks going towards the region of Ukraine

Quote from: NeuroticFish on March 01, 2022, 06:37:55 AM

I think that Putin also greatly underestimated what Europe will do in the financial vs resources part of the war.

Swift banning is what broke the economy of Russia. Biden made this threat earlier and I think he got his aligns to cooperate in the series of sanction.

Quote from: NeuroticFish on March 01, 2022, 06:37:55 AM

I honestly didn't think that Europe will become this united this fast (and I'm glad that I was wrong).

The speech of Zelensky was really touching to them and they have no choice than to fully give in to support. Although the EU have decided to sanction Russia. And giving the Ukraine application to EU speedy attention is just to show they are ready to take Russia economy down.

Bollexz1

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If he had kept the diplomacy talk on without invading, his stand would have been more respected and supported. At times, going into war isn't the best solution.

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Quote from: paxmao on February 28, 2022, 06:44:23 AM

I wonder if the Russian oligarchs are having second thoughts on supporting this guy any longer?

This madman will still get the support from oligarchs because in oligarchs there are also madpeople who have the same understanding as him, maybe that support will stop if there are massive protests in Russia who want Putin to step down (I don't really understand the political system there) or if they see this war going on longer so it will greatly affect their wealth and business, We have read a lot that Russia now has to fight against economic sanctions that make them suffer more.

Sir Legend

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When war occurs of course many unexpected things, what happens is usually bigger than planned, this is what creates long-term economic problems when a war occurs, there will be a lot of costs that must be diverted for war costs and whatever happens with war certainly brings problems serious and long term.

paxmao

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Quote from: Hydrogen on March 01, 2022, 12:31:22 PM

Quote from: paxmao on March 01, 2022, 11:46:51 AM

I think we are mixing macro and micro economy here. Profits from companies are different from purchasing power and people do notice the difference in my view.

I...

What does macro vs micro have to do with it? This is currently implemented and utilized in economies of the world. Its standard policy.

People notice the difference? This has been ongoing for many years. Decades. No one noticed.

Ok, I think we are talking about different things. One is inflation of the currency respect to the products. That has been the norm and is considered desirable to avoid people hoarding money without investing.

Now, the devaluation of a currency is relative to the other currencies. Governments tend to use the lame excuse that by doing so they are favouring the exports and thus the economy of the country, as it is cheaper to buy their products and actually does improve the results of companies that export in real terms, not just in numbers.

These are different things. The fact is that currency loses value respective to other is due to lack of competitiveness of the economy and, just as you said, reduces the purchasing power of foreign products.

Macro would be the general effect on the people and companies - general reduction in their capacity to import, whereas a micro effect would be a company increasing their bottom line in local currency.

doomloop

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Quote from: xSkylarx on March 01, 2022, 06:21:11 AM

at first, I didn't think economic sanctions would have much of an impact because, as far as we can tell, they are extremely powerful. However, this is only true for those armies that are currently suffering economically, and we can expect them to struggle as a result. I'm not sure if they'll be able to recover economically from their war with Ukraine because most countries have banned them. I am seeing a lot of assistance from other countries to Ukraine right now. I'm hoping that Putin will put a stop to this right now.

Same impression we have as I always think that Russia is a strong country so even if there are sanctions that will occur, they won't show that they are struggling even if deep inside it's already hurting them. We shouldn't feel bad about their soldiers because it was also their fault.

Without them the war aren't going to happen, they already know the consequences of their actions so now they are paying it. Ukraine on the other hand is now getting all the sympathy. from donations and to other stuffs. I am not sure if what you wish that Putin will stop will happen because like we said earlier, they are strong so they would fight till the end.

Hydrogen

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Quote from: paxmao on March 01, 2022, 11:46:51 AM

I think we are mixing macro and micro economy here. Profits from companies are different from purchasing power and people do notice the difference in my view.

If general motors profits $1,000 for every 1 unit of automobile sold.

And the US dollar exchange rate with the british pound is 1:1.

Great britain could purchase 100 units of GM automobile which translates to $100,000 in profits.

If however the US dollar devalues and the exchange rates shifts to a 1:2 ratio in favor of the pound.

Great britain could purchase 200 units of GM automobile (at the same price they could buy 100 units at a 1:1 currency ratio) which translates to $200,000 in profits for GM.

This is a method of boosting GDP numbers for nations like china with high exports.

These gains come at the expense of reduced purchasing power for consumers.

There are trade offs involved and of course the conditions will not be as drastic as the ones mentioned.

Still an interesting topic for discussion/debate IMO.

What does macro vs micro have to do with it? This is currently implemented and utilized in economies of the world. Its standard policy.

People notice the difference? This has been ongoing for many years. Decades. No one noticed.

ChiBitCTy

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Quote from: paxmao on February 28, 2022, 06:44:23 AM

This is 5 hours ago:

Quote

Russia will force companies to sell 80% of their foreign currency earnings - in other words buy rubles - Finance Ministry announces

This means that Putin is forcing Russian companies to buy rubles to avoid a free fall. This is normally done by central banks when their currency is under attack - the problem being is that when you need all your treasury to keep the invasion running, you cannot protect your currency. I wonder if the Russian oligarchs are having second thoughts on supporting this guy any longer?

https://twitter.com/JakeCordell/status/1498191397245042690

EDITED to add: I just got this from my broker

Quote

Summary of key points:
MOEX will remain closed on 28 Feb 2022.
All MOEX products will be available only for closing (position reducing) transactions.
Non-residents of Russia are blocked from selling securities on MOEX per Central Bank of Russia regulation.
IBKR will stop supporting GTC/GTD orders for MOEX products and will cancel existing GTC/GTD’s.
Reminder that RU products outside of Russia may be also impacted by short notice regulations/changes.

This a great point and good question. This is exactly why supporting communisms and dictatorships is not only wrong but insane. Who wants to live in a nation that has the power to force you to sell your foreign currencies, hurting you business because the government decided to go to war, which you had no control over what so ever. I am amazed at the support Russia has inside. Maybe much of it is simply due to being scared to speak out against?

paxmao

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Quote from: Hydrogen on March 01, 2022, 11:07:57 AM

Quote from: paxmao on February 28, 2022, 05:30:10 PM

Quote from: Hydrogen on February 28, 2022, 09:16:43 AM

...

This appears to be a good test for the "devaluing currency is good for exports" school of economic thought.

That is not a school of thought properly, but the usual lame excuse of governments that fail to remain competitive.

AFAIK many corporations define their profits in terms of units sold. For sake of discussion let's invent a random statistic: general motors reaps $1,000 in profit for every 1 unit of automobile sold. If the united states can devalue its native fiat currency by 100%. This enables them to sell 2 units for the price of 1, which might double their profits. This is one methodology behind currency devaluation being a worthwhile policy for nations with high exports.

On the opposite end of the spectrum, currency devaluation weakens the purchasing power of consumers.

While currency devaluation might appear good for exports and corporations, they can be bad for the purchasing power of individuals. And so they may represent a trade off where the strength of a currency is sacrificed for a better corporate balance sheet and perhaps better GDP stats.

I think we are mixing macro and micro economy here. Profits from companies are different from purchasing power and people do notice the difference in my view.

Hydrogen

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Quote from: paxmao on February 28, 2022, 05:30:10 PM

Quote from: Hydrogen on February 28, 2022, 09:16:43 AM

...

This appears to be a good test for the "devaluing currency is good for exports" school of economic thought.

That is not a school of thought properly, but the usual lame excuse of governments that fail to remain competitive.

AFAIK many corporations define their profits in terms of units sold. For sake of discussion let's invent a random statistic: general motors reaps $1,000 in profit for every 1 unit of automobile sold. If the united states can devalue its native fiat currency by 100%. This enables them to sell 2 units for the price of 1, which might double their profits. This is one methodology behind currency devaluation being a worthwhile policy for nations with high exports.

On the opposite end of the spectrum, currency devaluation weakens the purchasing power of consumers.

While currency devaluation might appear good for exports and corporations, they can be bad for the purchasing power of individuals. And so they may represent a trade off where the strength of a currency is sacrificed for a better corporate balance sheet and perhaps better GDP stats.

naira

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As citizens who fall into the category of Non-Aligned countries, here they will never justify acts of war for any reason. I don't really understand everything, I just listen day by day to the current situation. That too from the US-controlled media according to its political needs. Despite the loopholes, Russia is experiencing a bank freeze, airports are closed and more has been mentioned. In the end, there was no other way but to end things with all the decisions that had been agreed upon. In the next 7 days, the aggression and resistance of the Ukrainian people and the military are still adamant that they will not give up what is rightfully theirs. Not much different from other countries that maintain a plot of land in front of a house that is sold to a factory. Once not still not, because what you have sold is difficult to get back.

In response to Russia's economic fiat which has now weakened in recent days, the session at the United Nations even when the Russian representatives spoke, all representatives of other countries chose to leave. So that the impact will continue to receive sanctions, criticism from various countries. Finally back to the US who will win and benefit, whether Ukraine loses or even Russia, the US is the one who has the main role.

NeuroticFish

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Quote from: paxmao on March 01, 2022, 07:35:31 AM

Quote from: NeuroticFish on March 01, 2022, 06:37:55 AM

China has started to evacuate their people from Ukraine only today.
That may mean that Putin has told China that the war will not take longer than 4-5 days.

I think that Putin also greatly underestimated what Europe will do in the financial vs resources part of the war.
I honestly didn't think that Europe will become this united this fast (and I'm glad that I was wrong).

Unfortunately, my reading of this is that Putin may have told the Chinese that he has failed to secure a quick victory and has now to go into Godzilla mode on Ukrainian cities to seize control, as the Ukrainian army did somehow not bend to his delusion of being hailed as a liberator of shorts. This is very bad news and our leaders should works towards a halt and give a chance to diplomacy.

This indeed may happen. And it can easily turn into a long term guerilla war until the point one of the following things happen:
* Ukraine is conquered
* Russian or Belorussian army makes the crucial mistake of attacking something belonging to NATO
* Either a "James Bond", either a "Claus von Stauffenberg" ends this

paxmao

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Quote from: NeuroticFish on March 01, 2022, 06:37:55 AM

China has started to evacuate their people from Ukraine only today.
That may mean that Putin has told China that the war will not take longer than 4-5 days.

I think that Putin also greatly underestimated what Europe will do in the financial vs resources part of the war.
I honestly didn't think that Europe will become this united this fast (and I'm glad that I was wrong).

Unfortunately, my reading of this is that Putin may have told the Chinese that he has failed to secure a quick victory and has now to go into Godzilla mode on Ukrainian cities to seize control, as the Ukrainian army did somehow not bend to his delusion of being hailed as a liberator of shorts. This is very bad news and our leaders should works towards a halt and give a chance to diplomacy.

NeuroticFish

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China has started to evacuate their people from Ukraine only today.
That may mean that Putin has told China that the war will not take longer than 4-5 days.

I think that Putin also greatly underestimated what Europe will do in the financial vs resources part of the war.
I honestly didn't think that Europe will become this united this fast (and I'm glad that I was wrong).

xSkylarx

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Quote from: Wexnident on March 01, 2022, 05:37:46 AM

Quote from: el kaka22 on March 01, 2022, 12:53:02 AM

I do not understand how Russia could still stand, I was expecting 1 dollar to become 500+ ruble by this time. Putin will use this wrongfully to show how "strong" they are, I am afraid it will end up badly.

I think it already ended up badly? Like I was sure Putin was trusting of how strong their army was, but well, results show that it really wasn't any stronger. From what I read about how it was described, it was something like a paper tiger. Putin probably overestimated his side and underestimated the other side. Pretty sure this war has brought nothing but losses to Putin's side probably contrary to his earlier expectations for the results of his assault.

Russia is probably gonna experience a huge shift after this, and most likely in a negative way.

Agreed, at first, I didn't think economic sanctions would have much of an impact because, as far as we can tell, they are extremely powerful. However, this is only true for those armies that are currently suffering economically, and we can expect them to struggle as a result. I'm not sure if they'll be able to recover economically from their war with Ukraine because most countries have banned them. I am seeing a lot of assistance from other countries to Ukraine right now. I'm hoping that Putin will put a stop to this right now.

Wexnident

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Quote from: el kaka22 on March 01, 2022, 12:53:02 AM

I do not understand how Russia could still stand, I was expecting 1 dollar to become 500+ ruble by this time. Putin will use this wrongfully to show how "strong" they are, I am afraid it will end up badly.

I think it already ended up badly? Like I was sure Putin was trusting of how strong their army was, but well, results show that it really wasn't any stronger. From what I read about how it was described, it was something like a paper tiger. Putin probably overestimated his side and underestimated the other side. Pretty sure this war has brought nothing but losses to Putin's side probably contrary to his earlier expectations for the results of his assault.

Russia is probably gonna experience a huge shift after this, and most likely in a negative way.

davis196

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Putin was pretty much expecting Ukraine to surrender 48 hours after the invasion.He's simply delusional at this point.
This didn't happen,now Putin will get into the downward spiral of war-sending more troops into Ukraine,which will make the war even more expensive for Russia.Some guy was saying that Russia is losing 20 billion dollars per day for every day in which the war continues.
What is overwhelming for me is that the Putin/Kremlin propaganda continues in my country(even though my country is a member of EU and NATO).Many people in my country still believe that Putin is fighting the evil Ukrainian nazis and that Putin is the good guy in this conflict.I guess that the paid trolls,followed by some delusional fanatic supporters of Putin are doing a good job with their propaganda.

el kaka22

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Think about a nation that has been sanctioned, trades cut off, can't use exchanges, can't use other foreign money, 40%+ of their central banks money got frozen, all the rich people have their money frozen, all the flights cancelled, taken out of swift, and plenty other economical sanctions in the middle of a war, and look at some other nations like Argentina and turkey... Sometimes I wonder why that is, like Turkey for example lost a lot more value in their fiat in 2021, then Russia did during this war, maybe Russia will do worse over time, but Turkey did that like in a week.

I do not understand how Russia could still stand, I was expecting 1 dollar to become 500+ ruble by this time. Putin will use this wrongfully to show how "strong" they are, I am afraid it will end up badly.

arwin100

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Quote from: bittraffic on February 28, 2022, 09:37:02 AM

Isnt that sanctioning USD too? These oligarchs prefer to used USD for ease of transactions.

Russia is cut of from Swift and the oligarchs will be affected soon because they are the ones using the bank transactions from other countries. Which if these oligarchs are tracked they will also be sanctioned with frozen bank accounts. Oligarchs with frozen bank account is worse.

This war is getting crazy they better be just buying BTC instead, if they are going to make transaction censored proof.

Well, in their economic status right now. With USD going down, they're more down with it.

All connections financially abroad to Russia were cut off.

The title is correct, this is the cost for the invasion that they do and I think they've foreseen this happening. It's more war with Russia, not just with the invasion, economically and even in cyberspace, they are at war.

Maybe from this Putin will think about that they are totally downplaying things and think about they dominate this war and for sure the people doing business on their country will feel this heavy sanctions imposed to them by other government in parts of the world and slowly they can see their economy collapsing little by little. Maybe this is the reason why there's a peace talk happening since maybe some of there government official already see this alerting and might there country will put in more high risk situation if more countries will stop dealing with their products and other more coming from Russian country.

Topic: This shows Putin got the costs of aggression wrong (Read 204 times)