5 ms·

Supply and demand. 1. Capital controls. Russians are legally not allowed to sell their Rubles anymore. This decreases supply and keeps prices up. 2. A healthy

by jupp0r 5y ago

Supply and demand. 1. Capital controls. Russians are legally not allowed to sell their Rubles anymore. This decreases supply and keeps prices up. 2. A healthy dose of foreign currency ($1B/day from Germany alone) gives the Russian central bank plenty of tools to buy Rubles and increase demand for it to keep prices up. This does not mean that the existing sanctions aren’t working. Eventually Russian factories will run out of machine spare parts and everything will grind to a halt, people will use their jobs, demand for goods will decrease, other factories will have to close due to lack of demand for their goods, their workers get laid off - you get the idea. This takes time though. Disclaimer: I’m not an economist, but I do have a subscription to the Economist :)

native_samples 5y ago
> Eventually Russian factories will run out of machine spare parts and everything will grind to a halt Probably not. The Russian economy is unusually self-reliant, a legacy of Soviet times. It's pretty common to discover that for some niche weird thing there are only a handful of manufacturers in the world and one of them is Russian. For example: one reason it's hard to build nuclear reactors is that the containment hull has to be made of a special kind of steel that you can only buy from two companies in the world. One is Japanese, the other Russian. In particular their military is unusually self reliant. That's why they're famous for weapons exports rather than imports. > I do have a subscription to the Economist The Economist was pretty consistently writing deranged propaganda about Russia even 5 years ago so I really doubt you're getting accurate information from it now.
- deleted 5y ago
  [deleted]
- emteycz 5y ago
  I still have few "made in CCCP" things at home. All of them were unbelievably shit compared to their western not-competition at the time of manufacture. Especially computers, while the west already had Windows and internet and 3.5" floppies, 8bits with tapes were just getting started here - and of course it all was a copy of western designs. And most of it was made outside Russia anyways - e. g. they used Czechoslovak factories a lot because the quality was and is like from another dimension; our army refused Soviet tanks because of the shit quality and instead made our own based on the same design. That was when they were "self-reliant" for decades. After the fall, they switched to globalized manufacturing completely. And now you're saying they will be able to switch back in months, with much worse economy and nobody willing to help them? I'm laughing very loudly.
  - native_samples 5y ago
    But the argument here is not that they'll have to make do with lower quality parts. It's that they won't be able to get or make the parts they need at all. That is a very different and much less likely argument, especially as there are still many countries they're trading with through which imports can be routed.
    - emteycz 5y ago
      No, today it's the same. They're thousands of miles away from today's precision manufacturing. They won't be able to make usable parts. If they try to use whatever they produce, their machines will likely explode, or at least grind to halt.
      - emteycz 5y ago
        And their "friends" like China won't ever let them have the machines that produce machines, because that's how they dominate others (and China learned that well from the West).
        jupp0r 5y ago
        A good part of Chinese high tech factory machines are made in places like Germany [1]. This is slowly changing though as China is becoming a major exporter of production machinery themselves, albeit starting from the low tech side of things (think plastic molding).
      - native_samples 5y ago
        So then they'll buy more parts from their friends in Germany? After all, they have to sell the Russians something in return for all that gas. I think you are seriously over-estimating what sanctions can do. Even if some Russian machines do explode, much harsher sanctions have routinely failed elsewhere. It'd be nice if this is all it took to end the war but it seems unrealistic to assume so.
        5y ago
- jupp0r 5y ago
  > The Russian economy is unusually self-reliant Not anymore from what experts are writing, but only time will tell. Aircraft industry is a good example [1], as most planes operated in Russia require western maintenance parts that can’t easily be replaced. Other examples are in gas and oil drilling equipment [2]. > The Economist was pretty consistently writing deranged propaganda about Russia even 5 years ago You call warning about the danger of Russia invading neighboring countries driven by the ideological shift towards imperialism “propaganda”? [1] https://www.frost.com/frost-perspectives/will-sanctions-from-the-usa-and-allied-countries-cripple-the-commercial-russian-aerospace-industry/ https://www.frost.com/frost-perspectives/will-sanctions-from... [2] https://www.wsj.com/amp/articles/putin-admits-western-sanctions-have-disrupted-russian-oil-industry-11649945252 https://www.wsj.com/amp/articles/putin-admits-western-sancti...
  - native_samples 5y ago
    5 years ago? It was all about how Putin was secretly manipulating western elections via social media and leaders via secret blackmail material. All that stuff was nonsense from day one.
landemva 5y ago
>>> This does not mean that the existing sanctions aren’t working. What metrics do you use to determine 'working'? Can you provide a couple examples of sanctions working to provide peace?
- killingtime74 5y ago
  How about South Africa dropping apartheid? Didn’t take a civil war to accomplish
  - landemva 5y ago
    Good example there of internal change expedited by international actions. How do the present sanctions on Russia help expedite Zelensky allowing "Minsk agreement" elections in eastern Ukraine (Luhansk and Donetsk)?
    - theamk 5y ago
      Why would you expect current sanctions to help with that? Both DPR and LPR are under sanctions themselves.
simonblack 5y ago
Eventually Russian factories will run out of machine spare parts Most parts are able to be manufactured anywhere. Certainly, it is cheaper (generally) to buy the parts from the usual manufacturers. But supply and demand will cause those parts to start to be made, whether in Russia itself, or in China (more likely). If those parts start to get made more cheaply in China than the original 'western' parts, the western parts will eventually become uneconomic to make and be pushed out of the market. Sanctions are generally a two-edged sword. There is pain caused to the sanctioned party in the short-term, but the sanctioning party more often finds itself damaged in the long-term by being shut out of its traditional markets when the sanctioned party starts buying things elsewhere.
- EdwardDiego 5y ago
  It'll be interesting when they start buying Chinese knock-off parts for machines. It didn't seem to work out so well for Russia's IFV tyres... > One aspect that wasn't covered was that a lot of Russian vehicles are fitted with cheap Chinese copies of off-road tyres which may be a significant contributor to the problems Russia is having and exacerbating the poor maintenance Trent talks about. https://www.tanknology.co.uk/post/primer-ctis-tyres https://www.tanknology.co.uk/post/primer-ctis-tyres
  - simonblack 5y ago
    We've gone through the 'cheap Asian knockoff' cycles many times before. I can remember when it was Japanese stuff that was supposedly 'cheap and shoddy' but we all went out later and bought Mazda and Toyota cars and Canon cameras. Then it was the Taiwanese stuff and today the whole world can't do without Taiwanese computer chips. Then it was the Chinese stuff, and the same cycle. But the scene is changing. In the same way as I originally thought the Japanese stuff wasn't up to par and then bought a Mazda Rotary that I absolutely loved, I see that the Chinese Haval is not at all a bad SUV for the price. These days it seems to be that it's Vietnam's turn to be going through the cycle. Starting off cheap, and then later moving up the value-added ladder. History repeats. Products are made to a price. Just because we usually see the cheap Asian shit that our companies try to foist upon us doesn't mean those Asian countries can't produce high-quality stuff for themselves to use against us. There was a cartoon from the 1940s that showed Bugs Bunny finger-flicking a Japanese battleship that then fell to pieces. That wasn't at all the actuality of what happened when the US Navy finally met the Japanese Navy in early 1942.
notahacker 5y ago
They also had existing foreign currency reserves (far more than the foreign currency still flowing into the country) to sell for rubles to prop up the currency (easier to to force up the price for rubles when most people arent allowed to sell theirs) They're expected to run out of accessible foreign currency reserves soon if they continue at this rate though, and the head of the Russian Central Bank tasked with actually making the trades is not optimistic about Russia's economic outlook for this quarter...
- sam_lowry_ 5y ago
  > They also had existing foreign currency reserves Over half of those are frozen due to sanctions, but even the rest is hard to use, because any transaction may be blocked out of abundance of zeal. That's why capital controls are used to keep the official rate at pre-war level. Aside from restrictions on selling the ruble, Russian state forces all businesses that are paid in foreign currencies to immediately sell 70%. This increases the demand for ruble.
lionkor 5y ago
Issue is that only the west is sanctioning them, not e.g. China. By sanctioning them we are just strengthening the Russia-China, India, etc. relationships. To think the world relies on the west to a point where its existential is a bit excessive, in my opinion
- brnt 5y ago
  Russia does not earn all of its money in Europe, but it does most of its profit. There is a reason it engages in these multi-decade influence campaigns in Europe: the Chinese don't overpay nearly as readily because they can't.
- EdwardDiego 5y ago
  China's interest in a relationship with Russia is solely predicated on what it can do for China. Same for everyone else, I guess. But it leads to the question, what _can_ more trading with Russia do, that China can't get elsewhere?
  - sieabahlpark 5y ago
    Wow the world's manufacturing plant wonders what it can get out of having Russia be an exclusive customer. No way that can't backfire on the US! I swear a lot of arguments completely ignore how willing China is to put down the West.
- AbrahamParangi 5y ago
  The issue is that Europe buys their energy from Russia.
Mlller 5y ago
> $1B/day from Germany alone According to [1], all imports from Russia to Germany in March were 4B EUR, so rather $139M/day, not $1B/day. Maybe that is the amount for all of the EU (with Germany then contributing 13.9%)? [1] https://www.destatis.de/DE/Presse/Pressemitteilungen/2022/03/PD22_110_51.html https://www.destatis.de/DE/Presse/Pressemitteilungen/2022/03...
- nip 5y ago
  Gas [1] [1] https://www.bbc.com/news/business-61164894 https://www.bbc.com/news/business-61164894
  - Mlller 5y ago
    $1B/day is in fact the sum from all of the EU for gas and oil according to Josep Borrell, the EUʼs top diplomat from Spain [1], [2], [3]. The $139M/day ≈ 13.9% from Germany include oil and gas (according to the source I gave). The source you provided (thank you) reads: “Proceeds from the sale of Russian oil and gas amount to around $1bn (£770m) a day”. In the context of the article, it is misleading, unfortunately; in itself it could even mean ‘from everyone’. Itʼs probably the number given by Borrell. [1] https://www.euronews.com/my-europe/2022/04/06/eu-has-spent-35bn-on-russian-energy-and-just-1bn-on-aid-borrell https://www.euronews.com/my-europe/2022/04/06/eu-has-spent-3... [2] https://tfiglobalnews.com/2022/04/08/eu-gave-e1-billion-in-military-aid-to-ukraine-then-sneakily-transferred-e35-billion-cash-to-russia/ https://tfiglobalnews.com/2022/04/08/eu-gave-e1-billion-in-m... [3] https://www.ndtv.com/world-news/minister-says-eu-giving-russia-1-billion-euros-a-day-for-oil-gas-2865943 https://www.ndtv.com/world-news/minister-says-eu-giving-russ...
    - tacitusarc 5y ago
      I appreciate this back and forth, thank you. I’m disappointed in the BBC reporting here.
      - jupp0r 5y ago
        I also fell into the BBC trap (I’m OP), thanks for the correction and the reminder to not just look at the top google result.

by jupp0r 5y ago

native_samples 5y ago

> Eventually Russian factories will run out of machine spare parts and everything will grind to a halt Probably not. The Russian economy is unusually self-reliant, a legacy of Soviet times. It's pretty common to discover that for some niche weird thing there are only a handful of manufacturers in the world and one of them is Russian. For example: one reason it's hard to build nuclear reactors is that the containment hull has to be made of a special kind of steel that you can only buy from two companies in the world. One is Japanese, the other Russian. In particular their military is unusually self reliant. That's why they're famous for weapons exports rather than imports. > I do have a subscription to the Economist The Economist was pretty consistently writing deranged propaganda about Russia even 5 years ago so I really doubt you're getting accurate information from it now.

deleted 5y ago
[deleted]
emteycz 5y ago
I still have few "made in CCCP" things at home. All of them were unbelievably shit compared to their western not-competition at the time of manufacture. Especially computers, while the west already had Windows and internet and 3.5" floppies, 8bits with tapes were just getting started here - and of course it all was a copy of western designs. And most of it was made outside Russia anyways - e. g. they used Czechoslovak factories a lot because the quality was and is like from another dimension; our army refused Soviet tanks because of the shit quality and instead made our own based on the same design. That was when they were "self-reliant" for decades. After the fall, they switched to globalized manufacturing completely. And now you're saying they will be able to switch back in months, with much worse economy and nobody willing to help them? I'm laughing very loudly.
- native_samples 5y ago
  But the argument here is not that they'll have to make do with lower quality parts. It's that they won't be able to get or make the parts they need at all. That is a very different and much less likely argument, especially as there are still many countries they're trading with through which imports can be routed.
  - emteycz 5y ago
    No, today it's the same. They're thousands of miles away from today's precision manufacturing. They won't be able to make usable parts. If they try to use whatever they produce, their machines will likely explode, or at least grind to halt.
    - emteycz 5y ago
      And their "friends" like China won't ever let them have the machines that produce machines, because that's how they dominate others (and China learned that well from the West).
      - jupp0r 5y ago
        A good part of Chinese high tech factory machines are made in places like Germany [1]. This is slowly changing though as China is becoming a major exporter of production machinery themselves, albeit starting from the low tech side of things (think plastic molding).
    - native_samples 5y ago
      So then they'll buy more parts from their friends in Germany? After all, they have to sell the Russians something in return for all that gas. I think you are seriously over-estimating what sanctions can do. Even if some Russian machines do explode, much harsher sanctions have routinely failed elsewhere. It'd be nice if this is all it took to end the war but it seems unrealistic to assume so.
      - 5y ago
jupp0r 5y ago
> The Russian economy is unusually self-reliant Not anymore from what experts are writing, but only time will tell. Aircraft industry is a good example [1], as most planes operated in Russia require western maintenance parts that can’t easily be replaced. Other examples are in gas and oil drilling equipment [2]. > The Economist was pretty consistently writing deranged propaganda about Russia even 5 years ago You call warning about the danger of Russia invading neighboring countries driven by the ideological shift towards imperialism “propaganda”? [1] https://www.frost.com/frost-perspectives/will-sanctions-from-the-usa-and-allied-countries-cripple-the-commercial-russian-aerospace-industry/ https://www.frost.com/frost-perspectives/will-sanctions-from... [2] https://www.wsj.com/amp/articles/putin-admits-western-sanctions-have-disrupted-russian-oil-industry-11649945252 https://www.wsj.com/amp/articles/putin-admits-western-sancti...
- native_samples 5y ago
  5 years ago? It was all about how Putin was secretly manipulating western elections via social media and leaders via secret blackmail material. All that stuff was nonsense from day one.

landemva 5y ago

>>> This does not mean that the existing sanctions aren’t working. What metrics do you use to determine 'working'? Can you provide a couple examples of sanctions working to provide peace?

killingtime74 5y ago
How about South Africa dropping apartheid? Didn’t take a civil war to accomplish
- landemva 5y ago
  Good example there of internal change expedited by international actions. How do the present sanctions on Russia help expedite Zelensky allowing "Minsk agreement" elections in eastern Ukraine (Luhansk and Donetsk)?
  - theamk 5y ago
    Why would you expect current sanctions to help with that? Both DPR and LPR are under sanctions themselves.

simonblack 5y ago

Eventually Russian factories will run out of machine spare parts Most parts are able to be manufactured anywhere. Certainly, it is cheaper (generally) to buy the parts from the usual manufacturers. But supply and demand will cause those parts to start to be made, whether in Russia itself, or in China (more likely). If those parts start to get made more cheaply in China than the original 'western' parts, the western parts will eventually become uneconomic to make and be pushed out of the market. Sanctions are generally a two-edged sword. There is pain caused to the sanctioned party in the short-term, but the sanctioning party more often finds itself damaged in the long-term by being shut out of its traditional markets when the sanctioned party starts buying things elsewhere.

EdwardDiego 5y ago
It'll be interesting when they start buying Chinese knock-off parts for machines. It didn't seem to work out so well for Russia's IFV tyres... > One aspect that wasn't covered was that a lot of Russian vehicles are fitted with cheap Chinese copies of off-road tyres which may be a significant contributor to the problems Russia is having and exacerbating the poor maintenance Trent talks about. https://www.tanknology.co.uk/post/primer-ctis-tyres https://www.tanknology.co.uk/post/primer-ctis-tyres
- simonblack 5y ago
  We've gone through the 'cheap Asian knockoff' cycles many times before. I can remember when it was Japanese stuff that was supposedly 'cheap and shoddy' but we all went out later and bought Mazda and Toyota cars and Canon cameras. Then it was the Taiwanese stuff and today the whole world can't do without Taiwanese computer chips. Then it was the Chinese stuff, and the same cycle. But the scene is changing. In the same way as I originally thought the Japanese stuff wasn't up to par and then bought a Mazda Rotary that I absolutely loved, I see that the Chinese Haval is not at all a bad SUV for the price. These days it seems to be that it's Vietnam's turn to be going through the cycle. Starting off cheap, and then later moving up the value-added ladder. History repeats. Products are made to a price. Just because we usually see the cheap Asian shit that our companies try to foist upon us doesn't mean those Asian countries can't produce high-quality stuff for themselves to use against us. There was a cartoon from the 1940s that showed Bugs Bunny finger-flicking a Japanese battleship that then fell to pieces. That wasn't at all the actuality of what happened when the US Navy finally met the Japanese Navy in early 1942.

notahacker 5y ago

They also had existing foreign currency reserves (far more than the foreign currency still flowing into the country) to sell for rubles to prop up the currency (easier to to force up the price for rubles when most people arent allowed to sell theirs) They're expected to run out of accessible foreign currency reserves soon if they continue at this rate though, and the head of the Russian Central Bank tasked with actually making the trades is not optimistic about Russia's economic outlook for this quarter...

sam_lowry_ 5y ago
> They also had existing foreign currency reserves Over half of those are frozen due to sanctions, but even the rest is hard to use, because any transaction may be blocked out of abundance of zeal. That's why capital controls are used to keep the official rate at pre-war level. Aside from restrictions on selling the ruble, Russian state forces all businesses that are paid in foreign currencies to immediately sell 70%. This increases the demand for ruble.

lionkor 5y ago

Issue is that only the west is sanctioning them, not e.g. China. By sanctioning them we are just strengthening the Russia-China, India, etc. relationships. To think the world relies on the west to a point where its existential is a bit excessive, in my opinion

brnt 5y ago
Russia does not earn all of its money in Europe, but it does most of its profit. There is a reason it engages in these multi-decade influence campaigns in Europe: the Chinese don't overpay nearly as readily because they can't.
EdwardDiego 5y ago
China's interest in a relationship with Russia is solely predicated on what it can do for China. Same for everyone else, I guess. But it leads to the question, what _can_ more trading with Russia do, that China can't get elsewhere?
- sieabahlpark 5y ago
  Wow the world's manufacturing plant wonders what it can get out of having Russia be an exclusive customer. No way that can't backfire on the US! I swear a lot of arguments completely ignore how willing China is to put down the West.
AbrahamParangi 5y ago
The issue is that Europe buys their energy from Russia.

Mlller 5y ago

> $1B/day from Germany alone According to [1], all imports from Russia to Germany in March were 4B EUR, so rather $139M/day, not $1B/day. Maybe that is the amount for all of the EU (with Germany then contributing 13.9%)? [1] https://www.destatis.de/DE/Presse/Pressemitteilungen/2022/03/PD22_110_51.html https://www.destatis.de/DE/Presse/Pressemitteilungen/2022/03...

nip 5y ago
Gas [1] [1] https://www.bbc.com/news/business-61164894 https://www.bbc.com/news/business-61164894
- Mlller 5y ago
  $1B/day is in fact the sum from all of the EU for gas and oil according to Josep Borrell, the EUʼs top diplomat from Spain [1], [2], [3]. The $139M/day ≈ 13.9% from Germany include oil and gas (according to the source I gave). The source you provided (thank you) reads: “Proceeds from the sale of Russian oil and gas amount to around $1bn (£770m) a day”. In the context of the article, it is misleading, unfortunately; in itself it could even mean ‘from everyone’. Itʼs probably the number given by Borrell. [1] https://www.euronews.com/my-europe/2022/04/06/eu-has-spent-35bn-on-russian-energy-and-just-1bn-on-aid-borrell https://www.euronews.com/my-europe/2022/04/06/eu-has-spent-3... [2] https://tfiglobalnews.com/2022/04/08/eu-gave-e1-billion-in-military-aid-to-ukraine-then-sneakily-transferred-e35-billion-cash-to-russia/ https://tfiglobalnews.com/2022/04/08/eu-gave-e1-billion-in-m... [3] https://www.ndtv.com/world-news/minister-says-eu-giving-russia-1-billion-euros-a-day-for-oil-gas-2865943 https://www.ndtv.com/world-news/minister-says-eu-giving-russ...
  - tacitusarc 5y ago
    I appreciate this back and forth, thank you. I’m disappointed in the BBC reporting here.
    - jupp0r 5y ago
      I also fell into the BBC trap (I’m OP), thanks for the correction and the reminder to not just look at the top google result.