6 ms·

Not difficult to guess that Russia's entire economy will be toast in a matter of weeks, regardless if the sanction stay how they are or become more strict. The

by okl 5y ago

Not difficult to guess that Russia's entire economy will be toast in a matter of weeks, regardless if the sanction stay how they are or become more strict. The supply chain disruption and knock-on effects must be enormous. Be it specialized software products for which there only exists a single supplier or even just x86 CPUs. (Intel/AMD don't export to Russia anymore)

miohtama 5y ago
It is not just Russia. Europe and the UK will suffer as well as fuel and gas prices will raise significantly (2x?) of already high levels.
- daliusd 5y ago
  It is more complex. Fuel is heavily taxed in Europe so double price will be not double, maybe 50% increase. Still bad but not too bad. Gas (as not fuel for cars but for other means) will be different problem from country to country or even from town to town (e.g. my town might be gas independent by 2023 heating season)
- okl 5y ago
  We'll have to see that. For the short-medium term it will be a big pain. Europe I think can transition to some green (nuclear?) energy solutions in the next few years. Russia on the other hand -- if you exclude oil, gas, metals, there is not much left that the world buys from them.
- martimarkov 5y ago
  Yes the world (not just EU, UK and the "western" world, China and India are impacted as well) would suffer in general, russia's economy will be wiped. And the prices of oil will normalise fairly quickly when ppl stop with the panic as supply is currently not affected. It might be in the future but there are mechanisms and levers the world can use.
  - onemoresoop 5y ago
    If Russian supply is cut how do you see prices normalize? Or you simply mean they'll be stable but high?
    - martimarkov 5y ago
      They will be high but there are also reserves which can be used initially. Eventually the price will stabilise as the new supply chain (without russia) matures. I think as long as the price is relatively lucrative now so that transportation is seen as a priority then the price will not go extremely high.
  - humanwhosits 5y ago
    Raw supply is not affected but the supply chain on the finance side is, which can create artificial delivery shocks.
  - actuator 5y ago
    I think China is big enough that it can help ease the economic cost on Russia. There are a lot of natural resources, defence and research tech, that China would be glad to get in return as well. India on the other hand has a far weaker hand as they don't have the economic muscle to challenge the Western sanctions and they are dependent on Russia for military hardware. It seems mind boggling that they are not self reliant on defence equipment, even smaller ones. They can't replace all of that hardware with stuff from West as well, as that will be too costly.
    - GiorgioG 5y ago
      > I think China is big enough that it can help ease the economic cost on Russia They're not going to help Russia - they're going to exploit the situation and demand deals that are barely tolerable for Russia.
  - okl 5y ago
    > as supply is currently not affected As far as I have kept track, not a single barrel has disappeared from the market due to sanctions until now.
- axg11 5y ago
  How much would it cost to subsidize natural gas prices back to previous prices? Is this feasible? Would be very interested in an order of magnitude estimate. Innocent people are dying as the result of an unprovoked war. Sanctions on Russia will inevitably have some negative economic consequences for the West - the question is, what is the total price of these consequences?
  - okl 5y ago
    The thing with subsidies is that you just increase the price people are willing to pay for the same amount which will make the problem even worse since there is a bottleneck on the supply side.
  - miohtama 5y ago
    In the case of a war, rationing is more efficient tham subsidizing of necessities. This prevents hoarding and further price runs.
    - Lascaille 5y ago
      >rationing is more efficient tham subsidizing You can't ration energy in a democracy while simultaneously being staunchly opposed to the development of new energy generation infrastructure. No electorate will tolerate that. It is as pure an example of 'you're not doing your job' as I can imagine. One of the core roles of government is to guarantee food and energy security for its populace.
      - ben_w 5y ago
        I think the plan now is precisely to develop that infrastructure.
      - kavalg 5y ago
        and water
  - protomyth 5y ago
    Not in the near term, but I assume election wise the US will be back to full fracking and natural gas exports will resume from the US. Over $5/gallon pump prices are not a winning election strategy in the US.
- justapassenger 5y ago
  I'm personally happy to pay more taxes to help offset that. Western world spent trillions of dollars to try to offset impact from the virus. It's not a bad idea to spend even few more, to stop prospects of next world war/cold war and stop a madman who openly wants to rebuilt one of the most evil empires in the history.
- rjzzleep 5y ago
  My mother had an energy bill that was 3x higher than before. This shit is funny when you're in the valley and you have 6000 in pocket money to burn on stuff, but in Europe that means some peoples monthly rental expenses doubled. It's actually an existential threat for a lot of people. The German leadership just like the USA is so far detached from the normal population that they won't care, and the normal population in Germany isn't like in the middle east, so they will likely take it with some complaints. But since you can't easily get loans like in the US in Germany I wonder what that will mean for people that can no longer afford their bills though. I've seen people being taken to jail in Germany for unpaid 20 Euro bills or not paying public transit.
  - laurent92 5y ago
    They might be happy that their carbon independence finally becomes a thing and that their doomsday finally reifies. Worsening the sanctions until Russia cuts the gas is exactly aligned with their view of the world, and the worst thing that would happen would be peace.
  - aivisol 5y ago
    > It's actually an existential threat for a lot of people. I am sorry but you have your priorities wrong. The existential threat to all of us is sitting in Kremlin and we must stop him now. I am in Europe, winters in my country are cold with lows to -30 celsius and our the government has been shortsighted/corrupt for decades that we depend on Russian gas for heating for full 100%. But I will support cutting off that pipeline without thinking a second even if it costs me triple or whatever, or will be installing a wood stove. I have been of the other side of the Iron curtain for good part of my life, and believe me, energy bill will be your least worry.
  - rosndo 5y ago
    It’s the people unwilling to wear a little more clothes inside in order to reduce our dependence on an aggressive dictator with nuclear weapons who are out of touch, not the politicians. Just put on more clothes and turn your heating down, easy to drastically reduce your gas bill. Most homes also have tons of low hanging fruit to improve insulation. I know I’d be more than happy to wear an extra sweater or two in order to have Europe without wars.
xattt 5y ago
Here’s a Catch-22 situation I’m facing as a result of these sanctions: My family emigrated to Canada a number of years ago, but we have an elderly relative living in Moscow with moderate dementia who we’ve been supporting remotely with live-in care. We can’t bring them here because the dementia will be worsened by the change in environment (and the astronomical cost of health insurance until OHIP kicks in), but leaving them to live out their days in their apartment seems like it’s becoming a non-option as well, given the looming collapse of the economy and the likelihood that basic supplies won’t be available. What’s one to do?
- kofejnik 5y ago
  Moscow will be relatively Ok, regardless; and you dollars will buy a lot more help with the new exchange rate
  - abrowne 5y ago
    If they can still transfer them!
  - ska 5y ago
    I think it's a pretty strong assumption that they will be able to get dollars to them, or maintain good communication with their relative and/or emergency services if needed.
- ericd 5y ago
  Which route will lead to fewer regrets? If you can identify it, do that one, even if it’s expensive/painful.
- okl 5y ago
  Sorry, I don't know. But if Russia decides to "build a wall" and limit emigration, then there might not be any choice left.
- ChuckNorris89 5y ago
  >What’s one to do? All Russian population revolt on the streets against Putin and overthrow him. There will be mass casualties form the clashes with the military but sitting around under the fear of his iron fist and dying from mass poverty and shortages won't help you either. Look what happened to Nicolae Ceaușescu and the Romanian revolution of 1989. Hundreds of people died on the streets trying to overthrow that tyrant but it happened. No dictator rules forever. The population has to be willing to sacrifice themselves for the greater good and a brighter future.
actuator 5y ago
If this is the case, then at what point a coup/ground movement throws Putin away. A dictator can only stay as long in the power until he can keep people around him happy, even financially. There are young conscripts dying in a war in a state where many have brotherly relations with. At what point it is not just easy to turn those weapons on Putin.
- okl 5y ago
  At this point, but this is my personal impression since I obviously don't have any data on the matter, I guess that there are enough zombies in Russia to keep this war going until their soldiers literally starve to death.
- ploika 5y ago
  A lot of Russians remember when their country collapsed in front of their eyes. It's probably fair to say that even Putin's harshest critics would be hesitant to go through that twice in 30 years. Not that I'm defending him by any means, just that (by design) getting rid of him will be very ugly and never easy.

by okl 5y ago

miohtama 5y ago

It is not just Russia. Europe and the UK will suffer as well as fuel and gas prices will raise significantly (2x?) of already high levels.

daliusd 5y ago
It is more complex. Fuel is heavily taxed in Europe so double price will be not double, maybe 50% increase. Still bad but not too bad. Gas (as not fuel for cars but for other means) will be different problem from country to country or even from town to town (e.g. my town might be gas independent by 2023 heating season)
okl 5y ago
We'll have to see that. For the short-medium term it will be a big pain. Europe I think can transition to some green (nuclear?) energy solutions in the next few years. Russia on the other hand -- if you exclude oil, gas, metals, there is not much left that the world buys from them.
martimarkov 5y ago
Yes the world (not just EU, UK and the "western" world, China and India are impacted as well) would suffer in general, russia's economy will be wiped. And the prices of oil will normalise fairly quickly when ppl stop with the panic as supply is currently not affected. It might be in the future but there are mechanisms and levers the world can use.
- onemoresoop 5y ago
  If Russian supply is cut how do you see prices normalize? Or you simply mean they'll be stable but high?
  - martimarkov 5y ago
    They will be high but there are also reserves which can be used initially. Eventually the price will stabilise as the new supply chain (without russia) matures. I think as long as the price is relatively lucrative now so that transportation is seen as a priority then the price will not go extremely high.
- humanwhosits 5y ago
  Raw supply is not affected but the supply chain on the finance side is, which can create artificial delivery shocks.
- actuator 5y ago
  I think China is big enough that it can help ease the economic cost on Russia. There are a lot of natural resources, defence and research tech, that China would be glad to get in return as well. India on the other hand has a far weaker hand as they don't have the economic muscle to challenge the Western sanctions and they are dependent on Russia for military hardware. It seems mind boggling that they are not self reliant on defence equipment, even smaller ones. They can't replace all of that hardware with stuff from West as well, as that will be too costly.
  - GiorgioG 5y ago
    > I think China is big enough that it can help ease the economic cost on Russia They're not going to help Russia - they're going to exploit the situation and demand deals that are barely tolerable for Russia.
- okl 5y ago
  > as supply is currently not affected As far as I have kept track, not a single barrel has disappeared from the market due to sanctions until now.
axg11 5y ago
How much would it cost to subsidize natural gas prices back to previous prices? Is this feasible? Would be very interested in an order of magnitude estimate. Innocent people are dying as the result of an unprovoked war. Sanctions on Russia will inevitably have some negative economic consequences for the West - the question is, what is the total price of these consequences?
- okl 5y ago
  The thing with subsidies is that you just increase the price people are willing to pay for the same amount which will make the problem even worse since there is a bottleneck on the supply side.
- miohtama 5y ago
  In the case of a war, rationing is more efficient tham subsidizing of necessities. This prevents hoarding and further price runs.
  - Lascaille 5y ago
    >rationing is more efficient tham subsidizing You can't ration energy in a democracy while simultaneously being staunchly opposed to the development of new energy generation infrastructure. No electorate will tolerate that. It is as pure an example of 'you're not doing your job' as I can imagine. One of the core roles of government is to guarantee food and energy security for its populace.
    - ben_w 5y ago
      I think the plan now is precisely to develop that infrastructure.
    - kavalg 5y ago
      and water
- protomyth 5y ago
  Not in the near term, but I assume election wise the US will be back to full fracking and natural gas exports will resume from the US. Over $5/gallon pump prices are not a winning election strategy in the US.
justapassenger 5y ago
I'm personally happy to pay more taxes to help offset that. Western world spent trillions of dollars to try to offset impact from the virus. It's not a bad idea to spend even few more, to stop prospects of next world war/cold war and stop a madman who openly wants to rebuilt one of the most evil empires in the history.
rjzzleep 5y ago
My mother had an energy bill that was 3x higher than before. This shit is funny when you're in the valley and you have 6000 in pocket money to burn on stuff, but in Europe that means some peoples monthly rental expenses doubled. It's actually an existential threat for a lot of people. The German leadership just like the USA is so far detached from the normal population that they won't care, and the normal population in Germany isn't like in the middle east, so they will likely take it with some complaints. But since you can't easily get loans like in the US in Germany I wonder what that will mean for people that can no longer afford their bills though. I've seen people being taken to jail in Germany for unpaid 20 Euro bills or not paying public transit.
- laurent92 5y ago
  They might be happy that their carbon independence finally becomes a thing and that their doomsday finally reifies. Worsening the sanctions until Russia cuts the gas is exactly aligned with their view of the world, and the worst thing that would happen would be peace.
- aivisol 5y ago
  > It's actually an existential threat for a lot of people. I am sorry but you have your priorities wrong. The existential threat to all of us is sitting in Kremlin and we must stop him now. I am in Europe, winters in my country are cold with lows to -30 celsius and our the government has been shortsighted/corrupt for decades that we depend on Russian gas for heating for full 100%. But I will support cutting off that pipeline without thinking a second even if it costs me triple or whatever, or will be installing a wood stove. I have been of the other side of the Iron curtain for good part of my life, and believe me, energy bill will be your least worry.
- rosndo 5y ago
  It’s the people unwilling to wear a little more clothes inside in order to reduce our dependence on an aggressive dictator with nuclear weapons who are out of touch, not the politicians. Just put on more clothes and turn your heating down, easy to drastically reduce your gas bill. Most homes also have tons of low hanging fruit to improve insulation. I know I’d be more than happy to wear an extra sweater or two in order to have Europe without wars.

xattt 5y ago

Here’s a Catch-22 situation I’m facing as a result of these sanctions: My family emigrated to Canada a number of years ago, but we have an elderly relative living in Moscow with moderate dementia who we’ve been supporting remotely with live-in care. We can’t bring them here because the dementia will be worsened by the change in environment (and the astronomical cost of health insurance until OHIP kicks in), but leaving them to live out their days in their apartment seems like it’s becoming a non-option as well, given the looming collapse of the economy and the likelihood that basic supplies won’t be available. What’s one to do?

kofejnik 5y ago
Moscow will be relatively Ok, regardless; and you dollars will buy a lot more help with the new exchange rate
- abrowne 5y ago
  If they can still transfer them!
- ska 5y ago
  I think it's a pretty strong assumption that they will be able to get dollars to them, or maintain good communication with their relative and/or emergency services if needed.
ericd 5y ago
Which route will lead to fewer regrets? If you can identify it, do that one, even if it’s expensive/painful.
okl 5y ago
Sorry, I don't know. But if Russia decides to "build a wall" and limit emigration, then there might not be any choice left.
ChuckNorris89 5y ago
>What’s one to do? All Russian population revolt on the streets against Putin and overthrow him. There will be mass casualties form the clashes with the military but sitting around under the fear of his iron fist and dying from mass poverty and shortages won't help you either. Look what happened to Nicolae Ceaușescu and the Romanian revolution of 1989. Hundreds of people died on the streets trying to overthrow that tyrant but it happened. No dictator rules forever. The population has to be willing to sacrifice themselves for the greater good and a brighter future.

actuator 5y ago

If this is the case, then at what point a coup/ground movement throws Putin away. A dictator can only stay as long in the power until he can keep people around him happy, even financially. There are young conscripts dying in a war in a state where many have brotherly relations with. At what point it is not just easy to turn those weapons on Putin.

okl 5y ago
At this point, but this is my personal impression since I obviously don't have any data on the matter, I guess that there are enough zombies in Russia to keep this war going until their soldiers literally starve to death.
ploika 5y ago
A lot of Russians remember when their country collapsed in front of their eyes. It's probably fair to say that even Putin's harshest critics would be hesitant to go through that twice in 30 years. Not that I'm defending him by any means, just that (by design) getting rid of him will be very ugly and never easy.