4 ms·

> To be fair, one point at least seems accurate -- falling oil prices will probably doom Russia's government. I believe it will not. Only 38% of Russian GDP co

by ruslan 18y ago

> To be fair, one point at least seems accurate -- falling oil prices will probably doom Russia's government. I believe it will not. Only 38% of Russian GDP comes from Oil and Gas industry and this figure is contantly lowering, means the gov doing its best to devercify incomes. What's more, Russia has saved significant amount ($400B) of currency reserves. This will allow Russian government to support economy and stay afloat for a couple of years no matter what prices on energy resources will be. How much did US gov save ? ;)

earl 18y ago
I hope not too -- Russians seem to keep getting the short end of the stick. Nonetheless, Putin has burned through something like 1/3 of the foreign currency reserves in 6 months, trying to defend the ruble and rescue the stock market. Further, the Russian national budget assumes, IIRC, an oil price of greater than $80. This, obviously, is no longer the case. Last time I looked, oil and gas were supposed to account for some 30% of the federal budget; I'm sure that is no longer operative. See: http://www.globalsecurity.org/military/world/russia/budget.htm http://www.globalsecurity.org/military/world/russia/budget.h... There are hard times ahead for Russia, along with the rest of the world.
- ruslan 18y ago
  That is not correct again. $150B of the reservers were NOT spent on supporting ruble, but were allocated on supporting banking system and restructuring loans Russian companies borrowed from foreign institutions. But you are right, this was bad move, cause banks took rubles from the gov and instantly turned them into dollars thus harming ruble even more. Putin never supported stock market cause it is (and was) close to non-existant. Russian economy so loosely depend on stock market that even if it goes void noone ever notices that. :-)
  - earl 18y ago
    I strongly disagree. Russia made major purchases to support the Ruble. Viz January '09: Russia spends $30B in a week http://www.bloomberg.com/apps/news?pid=20601087&sid=aalw.8ABkiPs&refer=home http://www.bloomberg.com/apps/news?pid=20601087&sid=aalw... $40B sold in Oct, keeping ruble in desired band http://russiatooat.blogspot.com/2008/11/massive-foreign-reserves-outflow-puts.html http://russiatooat.blogspot.com/2008/11/massive-foreign-rese... further discussion of selling to support Ruble http://www.cnbc.com/id/29099569 http://www.cnbc.com/id/29099569 That's not to say that Russian hasn't spent hundreds of billions also on loans, and even more billions on loss of FDI and declaring financial war on foreign owned companies. But my point holds. In any case, I wish Russians the best of luck; they were almost uniformly kind to me when I lived there. But I think the probability that Russia avoids another governmental crisis is shrinking.

by ruslan 18y ago

earl 18y ago

I hope not too -- Russians seem to keep getting the short end of the stick. Nonetheless, Putin has burned through something like 1/3 of the foreign currency reserves in 6 months, trying to defend the ruble and rescue the stock market. Further, the Russian national budget assumes, IIRC, an oil price of greater than $80. This, obviously, is no longer the case. Last time I looked, oil and gas were supposed to account for some 30% of the federal budget; I'm sure that is no longer operative. See: http://www.globalsecurity.org/military/world/russia/budget.htm http://www.globalsecurity.org/military/world/russia/budget.h... There are hard times ahead for Russia, along with the rest of the world.

ruslan 18y ago
That is not correct again. $150B of the reservers were NOT spent on supporting ruble, but were allocated on supporting banking system and restructuring loans Russian companies borrowed from foreign institutions. But you are right, this was bad move, cause banks took rubles from the gov and instantly turned them into dollars thus harming ruble even more. Putin never supported stock market cause it is (and was) close to non-existant. Russian economy so loosely depend on stock market that even if it goes void noone ever notices that. :-)
- earl 18y ago
  I strongly disagree. Russia made major purchases to support the Ruble. Viz January '09: Russia spends $30B in a week http://www.bloomberg.com/apps/news?pid=20601087&sid=aalw.8ABkiPs&refer=home http://www.bloomberg.com/apps/news?pid=20601087&sid=aalw... $40B sold in Oct, keeping ruble in desired band http://russiatooat.blogspot.com/2008/11/massive-foreign-reserves-outflow-puts.html http://russiatooat.blogspot.com/2008/11/massive-foreign-rese... further discussion of selling to support Ruble http://www.cnbc.com/id/29099569 http://www.cnbc.com/id/29099569 That's not to say that Russian hasn't spent hundreds of billions also on loans, and even more billions on loss of FDI and declaring financial war on foreign owned companies. But my point holds. In any case, I wish Russians the best of luck; they were almost uniformly kind to me when I lived there. But I think the probability that Russia avoids another governmental crisis is shrinking.