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Same way the USSR went bust. Too much spending on status things it can't afford. The Russian economy is now smaller than South Korea, population 52M. It's called living beyond your means.........
When western automakers go to 100% electric vehicles 2035 ish, demand for oil drops, and electricity is increasingly made from renewable sources, Russia will feel the pain in the pocket
Since 1998 the value of the Ruble in foreign exchange has fallen by about 700% from 10 Rubles to the Dollar, to 74 : 1, today.
The USSR did not go "bust", it simply collapsed for societal problems, its centrally planned system was unsustainable, it did not run "out of money" or got "outspent" on defense like some people believe.
Dream on about going 100% electric by 2035....and even if this happen (it will not) where you are going to plug your Tesla?? Renewables?? Another wishful thinking.
A sovereign currency issuer does not "go bankrupt"....it's all about resource availability which Russia has to spare.
Russia is one of the handful of countries that can pretty much literally stop trading with anybody and survive.
The exchange rate comparison from 1998 is utter nonsense, 2021 Russia is immensely more powerful and strong than 1998 Russia
Last edited by saturno_v; 04-28-2021 at 02:40 PM..
EU parliament does not count for nothing (the motion was drafted by a bunch of Eastern European hysterical MPs anyway, it's not going anywhere)...it's all about what Germany wants.
The USSR did not go "bust", it simply collapsed for societal problems, its centrally planned system was unsustainable, it did not run "out of money" or got "outspent" on defense like some people believe.
Correct although lack of money for imports exacerbated the problem
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Originally Posted by saturno_v
Dream on about going 100% electric by 2035....and even if this happen (it will not) where you are going to plug your Tesla?? Renewables?? Another wishful thinking.
It's not us, its Europe that consumes Russian hydrocarbons. EV's and renewable energy are a direct threat to this income stream.
Quote:
Originally Posted by saturno_v
A sovereign currency issuer does not "go bankrupt"....it's all about resource availability which Russia has to spare.
Correct
Quote:
Originally Posted by saturno_v
Russia is one of the handful of countries that can pretty much literally stop trading with anybody and survive.
No, it needs money from selling resources. Well it depends on what you call "survive". North Korea and Cuba are surviving but not well. Not sure Russians are that willing to endure hardship. Able yes, but willing?
Quote:
Originally Posted by saturno_v
The exchange rate comparison from 1998 is utter nonsense, 2021 Russia is immensely more powerful and strong than 1998 Russia
Correct
Quote:
Originally Posted by saturno_v
EU parliament does not count for nothing (the motion was drafted by a bunch of Eastern European hysterical MPs anyway, it's not going anywhere)...it's all about what Germany wants.
Regarding fossil fuel exports, Russia benefits from Germany's hydrogen strategy because, what many people don't know, natural gas is at the core of several processes such as methane pyrolysis to produce hydrogen on a large scale without emitting any greenhouse gases.
Wow DKM..I'm surprised...finally we agree on something....
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Originally Posted by DKM
Correct although lack of money for imports exacerbated the problem
That was the problem...USSR final productivity was so low that they did need to import...an astonishingly rich country like the old USSR with only 250 mil of people or less should not have needed to import anything if managed properly...
Quote:
It's not us, its Europe that consumes Russian hydrocarbons. EV's and renewable energy are a direct threat to this income stream.
I believe US import of Russia crude are actually up lately.....however, properly managed, Russia does not need income stream from outside.
EV alone are not a threat to fossil fuel, renewable are but there are still enormous issues to resolve.
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No, it needs money from selling resources. Well it depends on what you call "survive". North Korea and Cuba are surviving but not well. Not sure Russians are that willing to endure hardship. Able yes, but willing?
It needs the money if it wants to buy imports (well it's a bit more complicated than that but I'm keeping it simple). Russia can trade with a lot of other countries, is not isolated, actually trade with quite few Western countries is up.
Putin real issue is still listening to a bunch of monetarist fools with Bank of Russia chief Elvira Nabiullina being one of them....lower interest rates and open the spigot of public spending (as long as debt is issued in Rubles) and carefully manage imports until domestic industry catch up.
However, Russia low unemployment rate point, in theory, to a tight labor market so a resource constraint that could trigger inflation...but I believe that there is more to the story, productivity need to be cranked up.
At the end of the day, the success of a country is determined in how much people believe in themselves, Russia is blessed with all the right ingredients in place....willpower is needed.
The USSR did not go "bust", it simply collapsed for societal problems, its centrally planned system was unsustainable, it did not run "out of money" or got "outspent" on defense like some people believe.
Dream on about going 100% electric by 2035....and even if this happen (it will not) where you are going to plug your Tesla?? Renewables?? Another wishful thinking.
A sovereign currency issuer does not "go bankrupt"....it's all about resource availability which Russia has to spare.
Russia is one of the handful of countries that can pretty much literally stop trading with anybody and survive.
The exchange rate comparison from 1998 is utter nonsense, 2021 Russia is immensely more powerful and strong than 1998 Russia
I think Russia is going to separate itself from a lot of the wests monetary systems. VISA, Mastercard and Swift. They'll have the Mir card which from what I hear can be done completely outside of the current US banking system. China is taking steps to do the same thing. Both are dumping the US dollar and with both working together they will not be vulnerable to western/US blackmail.
The greatest supermarket of resources in the world and the greatest economy in the world doesn't have to deal with the US.
In 2021 Russian GDP is about 5-10% greater than it was in 1990. By comparison US GDP has increased by about 350%.
I'm not good with economics like GDP but I know there's a difference between what's being done in the countries. Russias national debt is minimal, the US? Trillions in debt and it's getting worse. I see Russians buying cars, I see Americans living in them. I see Russians paying $1500 for cancer treatment. I know Americans being forced into bankruptcy for the same. Need I go on?
GDP doesn't seem to mean much considering I see one country improving the lives of its people and moving forward and the other one rotting away from the inside.
IL-96 400M has been canceled. Nobody wants it. It was supposed to be a key part of Russia "separating itself" from western plane makers. Oh well they can switch to Chinese planes as they switched to Chinese cars.
The USSR did not go "bust", it simply collapsed for societal problems, its centrally planned system was unsustainable, it did not run "out of money" or got "outspent" on defense like some people believe.
While it was a little more complex there was a new generation that saw things differently. The Cold War was not won by the west. It was more akin to 2 kids in an alley to fight after school and one just realizes nothing is going to happen and just walks home. Leaving the "victor" to bray to his bullied minions about his "victory".
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