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We'll see. Many countries are ignoring sanctions and cheaper currency means more competitive at exporting.
That's true when rubles are used for the transfer. But when yuan are used, they must be purchased by Russia. When the war broke out, Russia had a reserve of yuan, anticipating that yuan may be required for trade.
But it's been many months and Russia has spent all its yuan. Now, they must buy more in order to use it for trade.
Same applies to euro and rupee; Russia has very little in reserves.
No one wants to buy rubles; Russia is being forced to buy foreign currency. That's why the ruble is crashing.
Central to understanding this issue is to remember oil, Russia's single most important export, cannot be priced in rubles. Putin demanded that, but everyone refused.
The ruble's demise will continue.
For a look at what can happen to currency, look at Argentina's Peso. In 2013 it took 5.50 Peso to buy 1 US dollar. Now, it takes 287 Peso to buy 1 dollar. I see that sort of thing happening to Russia. For people inside Russia, it is felt as inflation. The result is, the average Russian will not be able to travel outside Russia because it is too expensive. And the all-important imported goods become outrageously expensive.
That's true when rubles are used for the transfer. But when yuan are used, they must be purchased by Russia. When the war broke out, Russia had a reserve of yuan, anticipating that yuan may be required for trade.
But it's been many months and Russia has spent all its yuan. Now, they must buy more in order to use it for trade.
Same applies to euro and rupee; Russia has very little in reserves.
No one wants to buy rubles; Russia is being forced to buy foreign currency. That's why the ruble is crashing.
Central to understanding this issue is to remember oil, Russia's single most important export, cannot be priced in rubles. Putin demanded that, but everyone refused.
The ruble's demise will continue.
For a look at what can happen to currency, look at Argentina's Peso. In 2013 it took 5.50 Peso to buy 1 US dollar. Now, it takes 287 Peso to buy 1 dollar. I see that sort of thing happening to Russia. For people inside Russia, it is felt as inflation. The result is, the average Russian will not be able to travel outside Russia because it is too expensive. And the all-important imported goods become outrageously expensive.
In terms of GDP PPP, Russia's economy has grown and is now the largest in Europe and 5th largest in the world as they have surpassed Germany according to the World Bank.
So Russian currency is down, but their economy purchases more total goods.
Sanctions haven't been entirely effective as of yet.
GDP PPP is usually better as a comparison, because it takes into account cost of living differences.
This is a risky time because the spring offensive failed and most Americans now oppose giving more aid to Ukraine. This might encourage the US or Ukraine to do something dramatic to change public support.
The World Bank is not Putin's propaganda.
You're being irrational.
PPP is better than nominal due to cost of living. For example, you can afford a significantly better lifestyle making $50K in Grand Rapids, Michigan than you can making $55K in San Francisco. In fact, making $50K a year in Grand Rapids can purchase about twice as much as $55K can in San Fran.
For a fact, per the world bank, Russia's GDP PPP grew and rose to #5. This means the Russian economy can purchase MORE goods than a year ago.
Russia is a relatively minor economy, much less significant than Germany.
And you assume the Russians can purchase anything! Like in the Soviet days. You can buy a Lada in white or a Lada in grey. Both look the same after 1 month of winter.
Russia is a relatively minor economy, much less significant than Germany.
And you assume the Russians can purchase anything! Like in the Soviet days. You can buy a Lada in white or a Lada in grey. Both look the same after 1 month of winter.
You're going full blown blueanon if you think the world bank is Putin propaganda.
Russia has the 5th biggest economy in the world in GDP PPP, per the world bank. That means they have a significant economy. They are also arguably the most important country in the world in terms of commodities, which makes them a significant economy.
It's okay to not like Putin/Russia, but don't be irrational about it.
No doubt there is some rational explanation for why car sales are down to a third of pre-war levels. Maybe Russians just don't want new cars any more.
Pictures of pre-war Moscow traffic show European and Japanese cars by the hundreds. Since all European and Japanese manufactures have boycotted Russia those cars are slowly deteriorating. Cars can be driven many months or even years without necessary repairs, but they don't last forever. Sooner or later those cars must be replaced.
Russians are just buying less cars, period. That speaks to the weakness of the consumer in Russia. This is as close to a proxy to deteriorating consumer sentiment as there is, and the story it tells is clear. Russians just aren't spending money.
China?..... China exported 40,000 cars to Russia last month. Owing to the collapse of the ruble, those Chinese cars cost 40% more than last year.
Europe exported used cars. You have to smile at that. Russia has become the dumping ground for used cars. Like Cuba.
The automobile industry in not sanctioned. It is being boycotted.
Last edited by Listener2307; 08-11-2023 at 07:24 AM..
You're going full blown blueanon if you think the world bank is Putin propaganda.
Russia has the 5th biggest economy in the world in GDP PPP, per the world bank. That means they have a significant economy. They are also arguably the most important country in the world in terms of commodities, which makes them a significant economy.
It's okay to not like Putin/Russia, but don't be irrational about it.
#1, As I stated the World Bank, which contrary to team blueanon is not Putin Propaganda, just released their new numbers and now has Russia as the 5th largest economy in the world in GDP PPP. GDP PPP is a useful tool as it adjusts for the purchasing power of an economy based on cost of living standards.
#2 Yes, Russia is behind in GDP per capita and has a lot of poverty at #56.
Yet no sane person would claim China is a minor economy with a GDP per capita of #73 or India at #127.
All I am saying is let's be honest.
(A) The sanctions have not been as effective as wanted, Russia's economy rose up to #5 this past year leapfrogging Germany in GDP PPP. Russia is selling oil ABOVE the so called "$60 price cap."
(B) Russia does not have a minor or an insignificant economy. Russia is a major energy exporter, Russia is a major commodity exporter. Russia is a key supplier of ingredients for fertilizer, a necessity of farming all over the world. They supply precious metals/rare earth metals. They are a net food exporter.
Russia could likely become very prosperous as a country if they weren't so corrupt.
The Wagner Group continues to maintain a presence at facilities in Belarus and the status of its rumored withdrawal to Russia remains unclear. Satellite imagery collected on August 9 shows a significant number of vehicles at the Wagner camp in Tsel, Asipovichy, Belarus, and may even indicate that more vehicles have arrived at the base between August 1 and August 9. Ukrainian sources continue to report about expanding Wagner activity in Brest Oblast, and a Wagner-affiliated source posted footage on August 10 showing that Wagner instructors continue to train Belarusian military personnel. The Wagner-affiliated source amplified a denial from an alleged Wagner fighter wherein the fighter stated that the speculations are “fantasies,” although he acknowledged that many Wagner fighters themselves often do not learn about their deployments until the last moment. ISW has not observed counter-indicators that would refute recent speculation from August 8 that Wagner bussed 500 to 600 personnel from Belarus to Krasnodar Krai and Voronezh and Rostov oblasts, however. Russian sources speculated that Wagner forces plan to conduct the second stage of their alleged withdrawal from Belarus on August 13 but that a small group of Wagner instructors would remain in Belarus to train Belarusian forces.
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