Why the Russian economy is doing much worse than expected
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- čas přidán 28. 07. 2022
- A look at why the Russian economy is doing much worse than headline statistics may suggest.
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What would happen if Russia turned off the gas supplies to Europe this winter? It would be bad for households, but by restricting supply and pushing up prices this summer, Russia has ironically made Europe prepare and already demand has been reduced 15% as firms and households find ways to reduce demand. See latest video at czcams.com/video/HRJAEB5E29k/video.html
I think like all western view points, everything is defined in a short term basis, this winter is not what we should worry about. It's not just gas, it fertilizer metals and other commodities. In Europe we turn raw materials into high value goods, if those raw materials become more expensive and the energy to convert them into goods becomes more expensive,
Where does that leave us in the long term as regards global price competition, and most of our consumer goods can be replicated in other parts of the world.
I think the real question is not an economic one, it's a question of who can withstand the most amount of pain.
What would you say now !? 🤣
Russia is that drunken friend that is quiet and says, he is fine until he collapses
they fight for own land ..own history and people ..the right to exist ...do they have any alternatives than to fight?
@@curocurovic6675 they fight for their right to exist by doing a 1939 to Ukraine? wtf are you smoking dude
@@stariyczedun this is a repeat of 1941
imagine you would build a house and give your brother half of it
because you love him
now your brother did reject kinship to you --- and wants to help people that want to eliminate you (and him) for a second time ....
what should you do ?alow it?
@@curocurovic6675 It’s just so that you didn’t build the house and that it doesn’t belong to you. You were just the one who beat him down again and again and kept him under your brutal rule for a very long time.
He also rejected your kinship because what you did to him and he seeks outside protection because you threaten him again and again and because you are now acting on your threats of violence.
@@chaospilot2142 you really need to research more about that region
i will repeat
"Ukra**ian nationalism arose at the end of the 19th century in Galicia, which was then in the AU. There, the first intellectuals appeared with the thesis that Rusyns were not Russians (there were no Ukr***ans then), and at the same time there was a stronger Russian movement of intellectuals that the AU strictly banned and arrested and persecuted. even Galicia was Russian until the end of the 19th century
Russins are people that did leave that region ( Galicia)200,300,400 years ago ..they are even today in surounding regions
That was used from certain people to create the new "borderlands " nation
and one of them ...Kaganovich did demonstrate why
They did create disorder and chaos..weaken a population
Now we have people like Nuland that wants to eliminate a population from the region in what they have been made and we support that people that want the same for us"
my question is ..should the population that did remain what their ancestors have been for 1000 years simply go away from the region that is their motherland because nuland is demanding it
should they surrender moskau ...that would become defenseless
as for " you didn’t build the house"
who do you think did free and develop the region ? who did build odesa(from where nuland's folks came to america btw)
I always remember as a small boy watching WWII films. They always seemed to be bombing ball bearing factories. I thought this was really strange until an adult explained that without ball bearings, no machine can operate.
The penny dropped about how important even the smallest of items can be, even critical.
It may take another twelve months but I can see Russia grinding to a halt.
Well machinery probobly can function without ball bearing, but there is significant degrade in machinery durability without certain product
Making anything in machinery turn, comes with heat unevenly, as the inner part heats up and outer part doesnt, mean inner part will grow in size duo to heat while outer part will take time
Making balls taking this tall, since with balls it has significant larger area of touch, also ball bearings are easily changeable, even the tiny balls inside can be changed, greater parts, takes greater ressources and time
In Russia's case, they never been good on maintenance, taking into account their military equipment it is usually made to break, disgarded and switch to replacement, cheap and require noting it terms of training
whatever stuff that they relie on for own use, productionand export+military
With first set of lusy maintenance and machinery lifetime is already up for debate, and whatever it produces is also less reliable
A good name for a book about WWII would be Ball Bearings and Tube Alloys.
@@todo9633, rather overly complex or enormous doesnt mean better
@@basiltozer9078 Airbus parts? Boeing parts? Toyota parts? Mercedes parts? VW parts?
@@basiltozer9078, sure they have material etc
Their Knowledge and their know how is questionable
If Russia can do all this why dont they?🤣
The moral of the story is:
Before you start an unprovoked war, make sure your economy is strong, self sufficient, and diverse.
Russias economy is none of those. And the fact that their military is based on 40 year old Soviet era technology is simply salt in the wound.
_an unprovoked war,_
Standard CIA narrative, way to repeat it as a brainless parrot. I didn't know that shelling people for 8 years and accumulating 150,000 troops on the border while intestifying the shelling of Russian citizens in Donbass is not a provocative action.
_make sure your economy is strong, self sufficient, and diverse._
You can't find more self-sufficient economy than Russian one. West expected that Russia would already collapse by now but it royally miscalculated. Russia barelly felt these sanctions. But then such people pop out and say "Russian economy is doing much worse than expected". Something tells me you expected very very different scenario. Country like Germany would collapse long ago after such sanctions.
PS: Biden was saying ruble costs 200 per dollar. It is not his idea it is what he was adviced and what their team expected, they royally miscalculated.
Seven months have passed. What do you say?All is good in Russia. Not sure about UK
One of the most serious consequences of cutting off oil and gas supplies to the west is the damage to the production wells and infrastructure. To stay viable, wells must produce and be maintained. In addition to this, much of the production machinery, equipment and technology comes from the west. By cutting shipments to the west Russia will do serious damage to both their economy and their energy assets. I think what happened in Venezuela is a good example of what happens when you are cut off from western technology, machinery and skills. Once the damage is done it could take years to rebuild.
I think you should consume less propaganda and you will appear less of a joker..
Everything does not come from the west dude certainly Brian is not a strong suit of native Westerners..
It's either loot or foreign immigrants taught you what you know. So be humble and accept the fact you guys are still in a nascent stage when the question arises regarding brain power..
Yep
Once you shut down a permafrost well, it’s done. Can’t restart it.
Iirc, last time a gas well in northern russia died it took 3 decades to start up again.
The recuperation of such cost is basically impossible.
Well the Russians are selling their oil and gas to China and India for a discount. That doesn't help either.
I'm from Kiev, Ukraine, I want to thank you for what GB doing for us in terms of economic and military support, you are saving lives!
Slava Ukrani !!! 🇺🇦🇵🇱🇧🇹🇺🇸🇾🇪🇬🇧
You guys are the good guys stand tall and continue resistance. The world is with you!
Kyiv*
@@ragnarthegr842 i'm russian speaking ukranian so it's Kiev for me but Kyiv is also correct if your native tongue is ukranian, cheers!
Never trust a Brit ,they are the biggest imperialist in the world ,they hate the EU along with Putin they tried to destroy the EU ,and unlike the EU Ukrainians need a visa to seek shelter there
Yes, indeed - What most people don't know, which has been true for a very long time,
is that the economy of Russia is no bigger than the state of Texas in the USA.
But each soldier in Russia only cost $1300/month whereas a texan soldiers cost closer to $2500/month.
@@tefazDK - Yeah ... ? And what's your point?
One more thing to add. wells don't turn on and off with a switch, and Russia has limited storage. The logistics of sending oil all the way around Asia to China/India by tanker instead of to Europe by pipeline don't just drive up transport costs, it chokes the volume that can be shipped.
Which means Russian oil wells will have to be capped. Probably starting with the least productive and oldest wells.
But once a well is capped, it is expensive to reopen, more expensive than the remaining reserves of most Russian wells.
So to the extent that Russia can't, physically, move oil and sell it, their oil production will go down, forever.
right and because we don't have oil from pipelines in europe we can pay the jackpot in a fucked up supply chain
@@Kr4zYm0f0 Supply chain is temporary, Russias problems are decades. By the time this war ends, the Russian oblast will remain but the RF will be gone.
@@hermiemostert5190
that was the intention and that is why we have this conflict
@@hermiemostert5190 by that time the whole western world will be bankrupt, and germany will see nato's old goal of german de-industrilisation come true
@@curocurovic6675 The reason we have this conflict is because Putin decided to invade Ukraine.
Nice video. Very informative and very accurate, very well explained. Thanks.
Really well thought out. Starting a war in an interconnected world, can be disastrous for everyone, especially the instigator. Russia’s allies in large part are oligarchies, is a small super wealthy class, and everyone else is broke. That alliance is also characterized by massive spending and debt. Another characteristic of oligarchies, is brain drain, were the youngest and most talented leave the country in search of brighter prospects elsewhere, with less endemic corruption.
America starts wars all the time.
@@jetnavigator why hasn’t anyone sanctioned America?
bud. Basically every Russian familiy has a car and a house/appartment. We dont earn that much. But products doesnt cost much either. Majority of tourism income for European countries was from russians.
Your stereotypes are wrong. It's not 90s anymore.
@@romanpyatibratov4361 Yeaaah just deny facts, that will for sure make things better... It's definitely back to the 90's again for you now, enjoy that as it is deserved.
@@romal111 not every single europe contry, obviously. but still. Like Turkey, Finland, Czech and etc
The point about the rouble strength being bad for Russia is valid. We are used to seeing basket case countries see their currency fall and when Russia started to see that people assumed it was going to continue and was evidence of it’s weakness. What it was was evidence of instability.
Now it is true that sanctions are cumulative and will hurt more over time and Russia’s economy is headed for dark times, we shouldn’t expect a rapid collapse in the near future any more than we should expect every Russian problem in the war to mean it’s military will pack up and go home any time soon. We have to prepare for a long war and long-term, escalating sanctions even as we aim to shorten the war by boosting Ukraine wherever and when ever possible.
Every dollar spent on Ukraine’s defence is a dollar saved on NATO’s defence in the future. We are obligated to defend NATO members who Russia has outright threatened with future conquest. Best to defeat them at Ukraine. And every dollar spent on divesting from Russia (and China for that matter) must only be spent once and not 10 years from now when Russia is fighting some other former Soviet state-and dragging NATO into it. Demand destruction and production capacity erosion will be Putin’s legacy for Russian oil and gas while they sell increasingly less at increasingly high discounts (to “frienemy” nation) for increasingly bloated roubles worth increasingly fewer dollars.
They are our enemies because they do not want to allow that what is done to us is done to them in the region in what they have been made...incredible intelligence
@@curocurovic6675 Expand your logic, you make no sense.
@@hermiemostert5190 i speak about reality ...not about expanding the ability to be opportunistic and follow what is pomoted
I don't know what you been smoking, but when I see pack of peanuts in my local shop for 9 euros, it seems to me our government fked up.
are you mental bud?
If it wasnt for NATO trying to encircle Russia with military bases - nothing wouldve happened.
Time after time after time Russia said "dont fkin put your NATO bases near our borders"
What NATO did? Put more military bases near Russia's borders.
Russia defends it's own interests and you outright urge to prolongue the conflict.
Now here is what you didnt mentioned:
EU's economic will collapse faster than Russia's. For a simple reason of: Russia is producing all necessity goods and resources. Europe cant produce enough food to feed it's population. Neither can it supply itself with enough gas and oils.
Russia may not have hight-tech products, that need to progress. But Europe will not have basic products, that need to survive.
ruble strengthening is bad only against dollar. As Russia cannot trade in dollars. It can trade in other currenciel. Like rupees and yuans. So saying "ruble is strengthened against dollar" is kinda pointless.
And value of dollar will decline with more countries moving away from trading in it. So strengthening ruble may be bad for Russia. But dollar losing relevancy is much worse for US. I'm not even gonna talk about how euro fell from it's grace because of the sanctions.
And final blow to your logic. You do not want a nuclear superpower to be isolated, alienated and blocked by collective west. If you will dare to threaten Russia's existence with financial and military blockade - nothing will be stopping it from going ballistic. First on Ukraine, next on NATO.
Long story short: sanctions will be lifted. At least some of important ones (on gas, fertilizers and foods). The rest wouldnt matter that much, as Russia would buy them from other countries. Other countries will begin uniting in economical alliances. And grace of US will fell.
Not to mention countries such as Iran, ravaged by US and sanctioned to the hell - still living. What to say about biggest country in the world
Good synopsis. Subscribed.
Thank you.
Good points. Thanks for the video
This is interesting, when traveling to Poland during the communist era the official exchange rate was 200zł to £1, whereas the black market the rate was 1,800zł to £1, We actually converted £ to Dollars as this was easier to sell.
People were desperate for Western goods and currency, but in those days trade was much more restricted between countries and today we also have China and India.
I was in Poland several times in the late 70s and early 80s and the most I got on the black market was 22 times the official rate for my SEK.
Poland was Germany's ally?
So it was the British and Americans bombing the German or Polish factories?
@@tyronelowe7090 as a reply to what? Delusion and your love for Russia?
Love people who are honest and peaceful. Who wants peace?
Not the west, because it's Ukrainians getting paid to die.
For what?
Peace is not important....kill Russians is the objective for democracy?
No love and no hate for Russians.
They have a reason for their invasion.
Why ignore their reasons?
West don't care about the reason otherwise they will order Zelensky to make peace.
Only idiots like Biden would be buying 1 dollar for 200 rubles. It is already a meme in Russia. "Who sold Biden dollars for 200 rubles per dollar??"
Really insightful video 📹, thanks
Great analysis.
The future in a population already declining with thousands of young men being killed in Ukraine..
Must effect the future of a country.. as you said so many people have left also ..
The damage done to the Russian weapons industry ..
Canonfodder the Russians send to the battle field in Ukraine come from the uneducated poor people living in small villages out in the fast country side.
the more educated young soldiers from Moscow or st Petersburg are not send to the front lines.
it's all politics.
the cannon fodder was most the men of the LPR & DPR, teachers,musicians and others without experience or modern weapons
@@jan22150 You are clueless. Russia has one of highesr levels of education in the world and it is pretty even throught the country. You just tried to demostrate that you know names of two largest Russian cities. Congrats. But don't project US reality on Russia. And yeah cannonfodder is what Ukraine is doing with its conscrips.
@@_Epsilon_ with all your better education that you have in russia. You still don't see what's going on in Ukraine. It's perhaps you are drinking the coolaid the Russians put out on their media.
You should listen to independent news sources to get a clearer picture.
The Russian soldiers are getting slaughtered in the Ukrainian country side.
80.000 soldiers have died so far ,in 5 months. Ridiculous!
Accurate. One of the many putting out this type of information.
Finally somebody that understands how it is and not just looks at the rubble
Which economy would be doing worse 3 months from now Russia OR the EU?
Europe needs a couple of months to recover and diversify its hydrocarbons, Russia is in a recession for 10+ years.
@@martijnstam6186 it will take more than months for EU to switch. And the Global South what do you expect them to be doing? Is the global south going to continue to supply EU with resources? Are they being factored into this equation?
Remember the Ruble would be crushed into rumbles. Putin would be out of office by now because of the uprising within Russia all that from Biden's own mouth. My guess Putin and Russia would survive much longer after none of these western leaders would survive the next 24 months and that includes Biden.
Russia has been planning for this for the last 8 years that they have been under sanctions. China is dumping its dollar reserves as we speak. Pelosi visit to Taiwan has erased any faith on the West and the US. The Ukraine crises has exposed western double standards. We all knew we were approaching a multipolar world but this has been accelerated by stupid and arrogant policies within the western Neocons.
EU of course, not just 3 months on but 3 years on the euro is about to collapse. Ignore these BBC watchers above.
Unfortunately I feel the comparison with Iran is valid - when you have got a wounded and snarling wild animal cornered, and its system flooded with adrenaline, it's neither open to soft-voiced entreaties to calm and offers of food - nor is it additionally perturbed by attempts to trap it or kill it. It's just neither listening, nor interested. There the analogy ends though, as at least with the animal, it can be tranquillised. But let's say that's not an option - I don't care how endangered and beautiful the creature is - if it comes down to you or it, and only one of you is getting away, well, we all know which it's going to be, given the option.
I do feel that since the West has quite rightly (albeit in its own, sweet time.....) taken a stand, that the most severe sanctions ever seen are entirely justified although I don't believe they're a particularly active means of bringing the war to a close - I think they're more simply a reaction to indicate displeasure and disapproval by the West at Russia's actions but I don't think on the other hand, Russia gives a toss, frankly. Or if it does, the only emotion it will provoke within the old Russian bear is one of petulance, truculence and an ever more sour and determined digging in of heels. While I do not agree with David Starkey's glib and blustering dismissal of Ukraine as a non-country by if not wholeheartedly agreeing, at least having a degree of sympathy with the Russian perspective that Ukraine is Russian - I do agree with an analogy he used to describe, in his view, the effects of the sanctions on Russia. He asked us to imagine witnessing a street robbery. He posits that sanctions are like you deciding you won't intervene and try to help the victim, but because you miraculously find that you have the mugger's credit card, you decide to cut it up. Clearly it assumes that the option doesn't exist for the mugger to contact his card issuer and request a new one. And so what he's driving at is that while the lack of being able to use his card will eventually affect the mugger, it does little to nothing to aid the person being attacked right there and then.
That being said, whilst it would seem that there is inevitably a degree of lag in the system - it may take months or even years for the effects of even these heavy sanctions to really bite - there is possibly an even greater lag in any recovery. In other words, not only may Russia be yet to feel the keenest sting of the effects, once the pain registers, it'll most likely be in the manner of eating one of those chillies that takes a while to notice, but builds and builds and builds and builds even long after it's been spat out.
I also agree that while China's noticeable silence on the matter is at sharp odds with most of the rest of the world, their relationship is hardly a love match and much more a marriage of convenience. I'm sorry, I know it's un PC to say but this isn't my viewpoint don't forget - it's merely what is written all over their respective faces behind the stiff postures and welded on smiles - Putin no more likes climbing into bed with the funny little Chinaman as Xi likes to snuggle with the burly and uncouth Russian prole. It is not the first time I have heard China - and I believe also India - are having Putin's pants down with the price they are paying for Russian hydrocarbons. Hardly seems like the behaviour of firm friends, does it? Xi is at best, staying out from under Putin's feet politically. Naturally, should Xi choose to go heavy on Taiwan, he would expect the same courtesy from The Kremlin - but you know for sure that, particularly now, with not much of the Russian army left anyway, even if China WAS counting on physical Russian assistance with Taiwan, that is now clearly impossible.
That being said, if Russia pivots to China not just to sell its energy but to receive from China things it previously relied on the West for, it may partially be able to fill the vacuum but not completely. Likewise, for Russia to claw back that lost 40% - a huge chunk of its economy - it could ramp up oil and gas production but of course risks making the country ever more vulnerable from lack of diversity.
Despite these many negative factors, in fact, it wouldn't especially matter if they were much worse. It's easy to forget that Putin is quite prepared to use the Russian people as a cushion and sponge. They tend to absorb hardship, more than they do to appreciate opportunity, it would seem - and certainly seem to accept the repression and intimidation as a reasonable price for the degree of stability that a "hard man" like Putin brings to their turbulent country especially as many of the older folk will remember Stalin and those years of famine and real terror. Therefore the West cannot rely on the effects of sanctions on individuals and communities to raise particular anti-Putin sentiments. If anything such privation could just as easily boost his popularity. This in turn is more than likely to strengthen the resolve of those politicians and oligarchs he's surrounded by making a palace coup as unlikely as a grassroots revolution. Finally, regarding the effects (or otherwise) on the populace, for sure, Russia can bring in fake McDonald's and I'm sure we have all seen locals going into the local version to compare it to the real thing and heard there's no difference - such wonderful naivety! They should return when the genuine McD's stock has run out......I digress - the point was simply this - we can safely assume that even if Russia can absorb a million of the 5 mil now unemployed former workers of foreign companies in Russia, I don't think those 4 million remaining represent anything like a sufficient political entity even to make a ripple in the political waters - unlike any other western country, such a huge number would catalyse vast waves of protest (if the war itself already hadn't). Likewise, the loss of tax revenue, not to mention the welfare or benefits bill the state would find itself footing, would be cataclysmic. Putin, on the other hand, isn't really bothered about ANY of that, digging instead, as he does, all the money he needs both personally and politically out of the ground.....
I'm sorry to say but it will be nothing or very little to do with economics - and everything to do with fighting Putin and Russia into exhaustion and to the last bullet. The quicker the West recognises that fact, resigns itself to the cost - and the very minor cost in the grand scheme of the Universe (not to mention WW2 where we had rationing til 1954!!) - and knuckles down to do what's necessary, the better. Any mealy mouthed, simpering and pusillanimous compromises - however well intentioned - are doomed to fail. We only need look back to Chamberlain's ill fated mission to Berlin in Sept 38 - and recall with bitter irony his "peace for our time" nonsense - for a reminder about negotiating with sociopaths who have less than zero interest in negotiations except for their potential to buy time if that is required. And Putin has gone WAY past the point Hitler did before Britain declared war with Germany. The fact Putin has technically not even declared war, is a red herring which can be utterly ignored. He has however, more or less stated last month that Ukraine is a good old fashioned imperialist expansion. So much for the Special Military Operation. In fact, when Putin is considered in toto, specifically in terms of his aggression towards neighbours (he's involved Russia in more than a dozen conflicts since assuming power) he is like a rat, nibbling at the southern and south western borders - or a cancerous tumour spreading south and west. He MUST BE STOPPED and it won't be done by economic sanctions - the only thing this despot understands, is force.
First of all, these sanctions are all encompassing, they are there to break the Russian Federation up into 20 states that already exist inside of Russia, the Russian Oblast being the 21st state. This war on Ukraine is all about resources. Ukraine's gas reserves are 3 times that of Russia, and the infrastructure to Europe already exists. Russia can not survive a war of attrition, lack of military hardware and trained combatants are telling you this. Lack of aid for Russia from friendly countries are another indication, and by December, internal conflicts will erupt and the Russian Federation government will be no more. All done in 10 months, no WWIII. Brilliantly done.
Nice synopsis! You've eloquently encapsulated everything that I intuitively understand of the situation having spent a fair amount of time in Russia myself.
You believe to much in RF stability prior to sanctions, prior to invasion Russia was already poor, weak and poorly managed with barely a semblance of rule of law , the economy was sluggish the government was a shame of a modern nation state even compared to non democratic systems , cleptocracy and corruption rule
This is why putler invaded in 2014 , poor poll numbers and civil unrest
Crimea was Russian speaking economically prosperous metropolis , something Sochi never has nor could be even though they are incredibly close , and what happened Russia invaded Crimea and now it's shit , no tourism no industry no nada
Civil wars have raged in Russia , border conflicts , Chechnya , protests in recent decades
That is all pre-sanctions, Russia has no independent banking system, they produce nothing and all their major consumers are making firm commitments to stop buying their only products....
These sanctions could easily dissolve the RF , the reason they were applied slowly by piece meal is that the western powers that be desperately wanted to punish Putler without collapsing the RF , many of those same financial firms own Russian debt , irregardless Russia collapsing is horrible for the world economy
But as each new sanction is ratcheted up, just know , they will never be reversed not even if putler passes away today , they will outlive him and likely the RF
@@knyghtryder3599
the sanctions would have come ...no matter what
and their goal is to weaken europe as well
@@curocurovic6675 No , they would not have, nobody wants Russia to fail, the goal was to prop Russia up after the wall fell and develop it politically and economically, that was why they got so much aid ,interest free loans etc , the global financial system depends on growth and profitable returns , not on sanguine stagnation and cleptocracy chaos war and confusion
Unfortunately for the Russian people , they were bamboozled by putler one of the worst and most moronic leaders in history , he should never have even came to power , before he and his KGB buddies blew up those apartments in Moscow causing the second Chechen war , he was an unknown , no name figure that couldn't even win mayor of his hometown
He literally robbed the Russian people and now the RF is about to collapse again, as I always say i feel bad for the Russian people especially for the ethnically non Slavic non Europans but hey follow putler the mad king at your own peril
Refreshingly calm and sober.
do you think the ruble will stay strong or will it fall?
The 'official' rate may stay strong if government are commited to capital controls, but the black market 'real' rate will depreciate.
It's already going down.
the real question is: do people want to buy ruble?
even those who are fans of 'ruble stronk' , still won't buy ruble.
ruble is worthless, doesn't matter whether it's strong or weak.
@@gendoruwo6322
ruble is very much a closed currency for the rest o the world
and its high value is for russia very problematic
i would purchase it if there was the possibility to access international trade from europe and trade with russia ...but for me(and all europeans) that is impossible
the ruble is too strong
even at 80 it would be too strong
If you look at what the federal reserve is doing, I believe that is going to be A major factor in reduction of the price of gas.
Interesting metric coming out of Russia, hotel bookings for internal holidays down about 50% and you can negotiate a price for a hotel stay, and thefts of cars and car parts are on the rise dramatically. The price of oil is falling rapidly again and India is nearing capacity for oil storage bought at discount from Russia.
Where is the subtitle?
The subtitles work for me. Thank goodness, because I found his pronunciation difficult to understand.
Your point, United States is also.
Does anyone know the unofficial exchange rate for the ruble’s? How desperate are people for western currency. (This is Soviet Union 2.0)
The problem for Russia, it can't really find other rich markets to sell it's oil and gas too, the EU and US being the big bulk of the rich world are customers you can't afford to get on the wrong side off, Russia has got on the wrong side of them, especially the EU which in the short term it's painful for the EU but they will adapt away from Russia, it's far more painful for Russia because they have limited options in where they can sell oil and gas too and even then, other countries, even friendly countries to Russia, knows Russia is in a weak position and will pressure them to discount the price of oil and gas a lot, that position will get worse for Russia as Europe moves further away from Russia which is likely going to make Russia more desperate, the likes of China, India and others are very likely going to take full advantage of Russia's weakness.
As for the EU, the pain is short-lived, probably till next winter when things start to ease off a lot and the EU is the key because high energy price and inflation might stay high around the world till the EU countries secure alternative energy sources.
There is a massive opening for the EU here to really push its renewable agenda, even thought the EU was pushing on that before, a lot of foot dragging was happening, now we might see them go full steam ahead which will be interesting to see the energy mix in the EU over the next decade, but either way, energy is becoming a security risk that I suspect a lot more countries will want to generate a lot of its energy internally, that is really bad news for the fossil industry and the longer and higher energy prices stay, the worse for that industry and better for the renewable industry that it wouldn't surprise me if in the long run, Putin might have wiped out a decade or more revenue from the fossil industry, that would be worth trillions to those countries that produce it, so in the short term they are profiting, longer term they could pay a very high price because of Putin's actions.
At the end of the day, never threaten your rich customers, because they will in time look elseware and that is what Europe is doing and once the EU shift away from Russia enough, it's very likely that the EU and US will go after those countries that are buying cheap oil and gas from Russia, after all, a lot of countries are not going through all this only for the likes of China and India to prop up the Russian economy, there is likely going to be a lot of pressure on those countries to stop buying from Russia with the aim of isolating Russia on the world stage and as the likes of the EU and US are by far the biggest markets to China and India, both the EU and US have many tools to pressure China and India on that, the end result is, Russia isn't that important on the world stage whereas the rich markets of the EU and US are and it's around then when Russia has real problems.
The irony is about that last bit, Putin is helping to speed that process up by cutting gas to EU, it forces them to adapt and look for alternatives quicker which is the last thing Russia can afford to do, but I understand why Russia is doing that, they've got no choice, they know EU is moving away from Russia, Putin wants to be seen as getting the boot in first to do more damage but the end result is a lot more damage to Russia whiles the EU will adapt because it has no choice but to adapt and as we know, a lot of change can happen in a short space of time with enough political will to do those changes and as for Russia, it was a massive mistake to use oil and gas as a political weapon, the moment you break trust on things like that, Russia is going to find it difficult to sell to anyone, even China and India will want to be careful to not get too dependent on Russia in case Putin gets political with them, that line has been crossed which will hurt Russia long term.
Oh and one last thing, the sanctions usually take years to really bite, but we should remember the long term aim from the west here on Russia, it's not political change that they are after, even thought that would be great, the west is wise enough to know that Putin will feed the Russian people a lot of lies to protect his own position, the west real aim here is to weaken Russia on the world stage, weaken it's political and economic power by isolating them, that longer term looks like it's going to work and Russia will find it difficult to adapt to that, so all Putin has done is speed up the decline of Russia as a power and let's not kid ourselves, Russia was in decline before the war started, the real powers in this world are the EU, US and China, whereas Russia for all its noise, only has an economy in between the size of Spain and Italy and the economy is the real power in this world.
Well written!
Short on facts and heavy on wishful thinking. Incorrect on most counts. Russia is and will be fine going forward. As for the EU going into renewables to replace fossil fuels, that is impossible, It is unreliable, impractical and so expensive it makes it impossible.
Very nice analysis. If it didn't have nukes, Russia would be completely insignificant on the world stage and it is becoming less important by the day. They really have a massive lack of self-awareness.
The UK and eurozone is also doing much worse than expected.
It was expected
It's as expected by anyone with a sense of economic reality.
@@Eleftheria_i_thanatos Yes, intelligent people knew what the effects of the pile of sanctions on EU/UK would be, but the politicians did not, nor did the brainwashed masses.
The French company Thales has been providing the Russian military industry with infra red sensors and other sophisticated electro optics and electronics equipping tanks and fighter jets (Damocles targeting pods used on Su-35 for example). This has continued after 2014 because the contracts were signed before the Annexation of Crimea. It is now stopped to the great chagrin of Thales. But can Russia now source this equipment using straw men, faked end user certificates or just source dual use components and build it's own? How does Iran source it's own electro optics for its domestically built drones that it is now selling to Russia? I can personally buy high end night vision goggles used by hunters (cost about 5000 us$ per item) on the civilian market and smuggle them out of the country for example. It mustn't be to hard to smuggle the crucial components using the diplomatic bag. They are small high value items, and you only need a few hundred of them.
Questions worthy of answers, I think.
Well doing this on a scale needed for fighting a war is basically undoable.
Interesting comments on the demographics and the eventual effects on the high end technological sector in Russia (though yet again, this is more guess work than actual economics). It would have been good to note that the Russian economy is largely self sufficient (at least on food and general consumer goods), hence the limited effect of the sanctions as highlighted by the IMF report.
On the energy sector, it seems the author doesn’t really understand how this sector works.
1. The supply of GLN from the US: there are not enough capacities in US to actually, and sustainably, replace the Russian gas source. It’s a simple fact that led the head of the main US oil & gas companies to address a firm rebuttal to Pdt Biden early June. This fact is equally underlined by the Qatari gov. In addition, the author seems to silence the question of the cost of the GLN (due to the transformation and transport infrastructures it implies).
2. Contrary to what we often read or hear, gas is the least profitable energy market. Way below oil.hence a reduction of supply in gas doesn’t have the crippling level of revenue cutbacks it is declare to have.
3. On the discounted cost of sell of the Urals (name of the Russian crude oil): it is abt $30/35 per brl., for a dated Brent of about $100. What to consider is that the break even point for Russian oil is around $10. Hence their capacity to remain profitable at $40 as it was 2 years ago. It is sold at $70 after discount now….
4. A high price of oil will push European economies to increase their investment in renewable energy: it is exactly these kind of fallacy that has led Germany to the situation it landed itself into. There is no real subsistions possible between fossil fuel and ‘renewable energy’ as we know them today. In this case one can say that there is a weak inverse correlation between high price of oil and its demand. Fossil fuels cover globally 80%of our energy needs. This percentage has been stable for he past 100 years.
The USA is the largest producer of oil in the world as well as natural gas… It has the best real estate in the world. The USA capacity question was gathered from a meeting that identifies wanted to improve refineries to improve capacity. This is happening. And more gas is being pumped. You give these abstract statements with no real value… Europe will most likely go back to its colonies for oil
So the Ruble is strong for artificial reasons...... strangely reminiscent of that Aesop fable about the fox and the grapes.
This didn't quite go the way Putin had planned
@Mārcis Bukovskis you're talking about a man who is surrounded by yes men. And they are yes men because they are afraid of being poisoned or irradiated. You get this, yes?
@Mārcis Bukovskis needs some work
Like with Iran and Iraq, sanctions may not bring about political change but they certainly may impact a state's ability to project power, and that alone makes sanctions worthwhile.
Great video! Will definitely be using these slides
Slava Ukraina🇺🇦✊
@Ace MCmillan *************** BOT *************** REPORTED *************** FOR ************** SPAM ************
Fascinatig
Interesting piece from Bloomberg: _'The top three largest employers in Russia are the oil and gas industry, the shipbuilding industry and the nuclear power industry. The top three largest employers in the United States are Walmart, McDonalds and Home Depot'_
You can do the Math.
Estou rezando para que exploda.
The problem is everyone looks at it from the point of view of modern monetary theory. Which has its merits but also has its flaws and right now we are in the period of inflation where MMT shows it’s weaknesses.
So your statement has actually not stated anything, It is like stating "normal is what we have, so normal is what we have".
No in addition inflation here is caused by the mother of all energy super cycles and possible end to the global system as we know it. It is being trimmed by the USA to friendly countries
I saw another economist who said that it doesn't even matter if the Ruble is strong: they can't spend it because nobody will do business with them.
Lmao yet China has no problem trading with them and in fact European countries are still buying natural resources from Russia
the Russian ruble will go the way the Zimbabwe dollar.
Zimbabwe is printing notes of 1 million dollars.
@@jan22150 Don't be so stupid, it is the bankrupt USA , Euro and £ which is heading for hyperinflation who have been printing and printing since 2008, whereas Russia has no debt and a strong ruble
@@voice.of.reason all we have to do is wait. Let's say until the end of this year.
See which country has gone under
Russia or the USA. ?
@@voice.of.reason Yeah, i have heard that statement the last 100 years, but still it have not happened...What Russia have is nothing. Their economy will go down, no doubt about that.
7:10 Russia is not a member of OPEC tho.
It is a member of OPEC+
How can a country with vast untapped resources have an economic collapse?
Please explain.
If you take drugs anything is possible
wait a year or two until their reserves run out....it will be new north corea after that
Only a beerhelp is done quick, but also reading the IMF evaluation on the Russian economy behavior and listening to V. Orban`s conclusions on the conflict in Ukraine takes not quite that much time
CZcams, can you please provide a x4 speedo to settings?
Even at gòod price for germany
It was secure money
Pupin's Aurus car can no longer get spare parts from the West, so Pupin has to take the Moskvist car into use
But Wadka sales have to be up alot
Long term, Russia is demographically and economically screwed.
With ongoing technology advances, gas and oil will become more and more irrelevant.
Green energy is a pipedream
The strong Ruble is also bad for all exports, but especially crude oil, which is bought and sold using American dollars. So Russia is paying more to extract those resources due to the high Ruble value, China and India are buying that oil using US dollars, the infrastructure to transport liquid fuels to China & India is virtually non-existent, and they're both further buying at a nominal discount
No, Russian oil is bought in rubles. The west is paying a premium for non Russian oil. Not paying a premium is called a discount. Overall this guy is just a BSer
@@dororthyruth3045 China uses Yuan, which since it's a currency which is still more or less pegged to the US Dollar, means Russia is losing money still. I'm ok with that. There are allegations they're also bartering, trading goods/weapons/etc for oil
@@dororthyruth3045 In a way yes. The contract is in euros, but Russia demanded payment in Rubles. So a bank account was created that can be paid into in Euros and Russia will take it out in Rubles. The bank uses the official conversion rate, so even though they get Rubles, the amount they get is the same as being paid in Euros and converting that to Rubles.
Democracies: Send Ukrainians everything they need pronto; let them put an end to Putin's folly. Slava Ukraine 🇺🇦🇨🇦!!
_Slava Ukraine 🇺🇦🇨🇦!!_
That's a far-right slogan if you didn't know it. Comes from WW2 Nazi collaborators and brutal war criminals. Later they ran to Canada by the way.
Yeah Einstein, everyone knows about Bandera etc., but 100 years hence the Kremlin is still the Holodomoric perpetrator., therefore Pissonya Ivan.
@@_Epsilon_ Send Ukrainians everything they need pronto; let them put an end to Putin's folly. Slava Ukraine 🇺🇦🇨🇦!!
Has anybody thought about why Russia doesn’t declare war on Ukraine? They are clearly short of manpower so the logical thing is that you declare a war and you could mobilize millions of people under a draft. To me it’s very revealing that they do not do this. What it shows is how unpopular this war is in Russia. The Russian government fears that a general mobilization will motivate people to potentially revolt.
Russia doesn't need to mobilize anyone. They are comfortably winning even being outnumbered because it is largerly artillery competition and Russia is way better at it. And yes the process is little slow but because road roller goes slowly doesn't mean that it doesn't succeed and that the road is winning against it.
Also most of the combat operations in the Ukraine are not even conducted by Russian forces, but by LDNR forces supported by Russian C4ISR and firepower. But in terms of her real military potential, Russia has used less than 10% of her military and Putin was quite candid about this when he said “we have not even begun to act seriously“.
You forgot that four people and companies from the outside were not allowed to sell Russian shares.
The Title should be *why the Russian economy doing much better than expected* .
@@jeffparr9675 Russia is self sufficient in Energy & Food and they are ner exporter of both.
worse than expected? I would say they do magnitudes better than expected.
Expected: Empty stores, cars and electronics un-repairable, no air traffic, all russian industry grinding to a halt due to defective and unrepairable industrial equipment. Famine upcoming because of broken down farming equipment and processing facilities.
Power stations breaking down one after the other because of failing electronics and no replacements etc.
So I hope this will happen over the next months with the inevitable revolution after that. But I doubt it. Too many right and leftwing governments in the West who want to appease Putin to make that happen. They know they just have to hold out until the western countrys have their revolutions and become dictatorships just like him. And I guess that will happen faster as a breakdown of Russia.
Gas is a huge income stream for Russia to the West (Europe).
Late US Senator John McCain: Russia is a gas company, operated by a mafia, masquerading as a country.
We have all the vegetables in our stores in Russia
..they are making $ 1B everyday profit on O&G...
Profit or revenue?
Sad, but true. " Don't trust the Russians, they don't even trust themselves. " Otto Von Bismarck, German Leader
" Father " of modern Germany.
Russian rouble is strong and very hard like roadside rock. Very very difficult to convert it and useless in global market.
I want to see a video that predicts what Russia will look like in the long term. Assume that what I mean by long term is 1 year after Ukraine ejects Russia completely, assuming that it does.
That is an interesting question.
Russieh is a one-man army; Poontin falls Russieh falls!
When was the last time anybody bought something that said "Made in Russia"? That tells you everything.
And the last time you bought something made in the US or made in England? That should tell you something....people in glass houses shouldn't throw stones.
@@lancemaleski6077 Both England and the U.S. have enormous consumer manufacturing. That's not even counting the amount of British or American consumer goods assembled outside of the country. The only thing Russians have ever made are products that can kill you.
@@anthonymorris5084 When did you last buy something from the UK or the US?
@@lancemaleski6077 Why are you repeating yourself?
@@anthonymorris5084 Because you never answered my question first time round. I won't repeat the question again....
🇮🇳 soon be number importer of Russian oil... And china and India make up for more than 30% of the World oil imports... Imagine the Rubble-Rupee trade on top of it..
Why do you think import of oil and gas from Russia to India and China will be a problem for western countries? It will leave India and China dependent on oil from Russia, while Europe no longer will be it. It is a win for Europe. Now it will be much easier for Europe to get oil and gas from other places.
@@artugaradukin6119 lol no one remain dependent on any one in this World... Eventually Europe also find it's way out of Russia's hand...
You are still a kid who needs to learn a lot about World politics and international relationships..
Lol Gas is not a portable thingy you can pack in the container and ship it to the destination. That's why I am suggesting stop wasting your time in matters you don't have a clue about...
Master then IMF
Russia had cash reserves totaling over $643 billion before the war started. Currently they have less than $300 billion in total cash reserves, estimated. Unfortunately for them they had approximately $300 billion of those cash reserves in western nations and that $300 billion has been seized and will be used as war reparations to Ukraine. The war is costing approximately $1 billion per day to Russia.
Us Imports 5% of its diesel from Russia but we don't need to. We can pay a little more and do just fine. China depends on America for a great deal of food believe it or not and we can shut that off at any time. Germany had the highest dependency on oil from Russia the rest of Europe does not on average at all important 40% of Russian gas
JIMMY DORE IN SHAMBLES
Sounds like now is the right time to invest in horses and carts in Russia….
Russia sees this as now or never because of their demographics, but I think it was 10 years ago or never because of their demographics.
So many experts, on the comments section.
So I will add my expertise too.😜.
The problem with some of this argument is that we no longer live in a world where technology is the preserve of western countries, so alternatives exist, and competition and necessity gives rise to ingenuity.
Believing that the west is the source of all innovation in this decade is a fallacy, sure Russia will be in a decline for the next 10 yrs, but gaps created in the market, leaves openings for new companies that need to expand. Chip technology is now at its foremost in China, with recent advances in lithography in chip manufacturing,and semiconductors, there is more scope for growth,
The biggest loss in this war is ultimately ours( a russo Chinese alliance and integration, is an insurmountable mountain for the west, and time may prove this wrong, as it stands, China now has a land access to all the resources it needs.
In my expert opinion, this is the real prize.
When observing Geopolitical affairs, things can change rather quickly these days. Unlike the 90's 30's 50's or even 2000's things can change overnight, let's see how the China American relationship unfolds After Pelsoi stunt.
Russia is prehistoric +they need to realise that
The Russians despise Westerners. you are nobodies who think too much about yourself.
Go sell some ice cream because that's what you can do 😀😀😀
Go with a real currency! BRICS
You shud be more concerned about the collapse of the eu come winter
It is beyond tragic that not only the Russian people but the world at large suffers because one small man wants to see himself as Peter the Great.
It`s tragic the world suffer , because Victoria decide to sell her cockies.
If the Russian economy is so bad, how were Russian troops able to push the French out of Mali?
I pitty the aveage Russian citizens that have to suffer, because of the ambitions Putin and his gangsters.
This is exactly the same as 2 other reports I heard about the Russian economy. This could be the original but these facts and analysis are being regurgitated by someone. It's exactly the same information.
If you haven't realized yet, Putin is not fighting against Ukraine, but against the dollar.
I believe this is 100% mistaken. 1) Europe has NOT been able to replace Russian Gas, Germany is canceling the use of HOT WATER in the name of austerity. Their biggest chemical plants are already shutting down. 2) Europe is already rolling back the Sanctions, including some of the examples listed here, for instance I understand airplane maintenance/parts are already back on the menu, although China has already agreed to supply the necessary parts anyway. 3) Russia has been banking record profits despite selling oil at a discount. It has been far more successful at finding new buyers than the EU has at finding new sellers: Indeed, most all Western attempts to get pumpers like Saudi Arabia to increase their output has dramatically failed. Its the EU that pays premium prices to buy Russian oil through intermediaries with a mark up. 4) Russian gas piped into Europe has declined because, after Canada held up the turbine repair, Russia is 'finding problems' with Nordstream 1 to use as leverage to make the Euros open up Nordstream II, which will effectively make the entire old Soviet Ukranian system obsolete. The Check to see if I'm right is easy: Look in the coming weeks, or months, to see if Nordstream II opens. If Europe wants to keep the lights on , it will, because tomorrow Russia could cut them off completely if it felt like it.
They have record revenues because they have sold more volume.
@@ChucksSEADnDEAD Yes, but thats fine for them: they have it to sell it! The point is they're not starved for funding.
@@andrewstout5400 If they're not starved for funding why are they having to sell more?
Going on a fire sale is usually a sign of desperation.
What about the UK,, U S A,, E U,, all in or going into recession, and a lot worse than Russia,,
UK and EU are heading to recession, but they will recover.
Ukraine still needs help and we can do this. Come back alive Ukraine, Blue and Yellow a Lithuanian organization that supplies drones, or VestForUkraine which supplies vests and other much needed gear. These are all good places to donate even a little to help Ukraine kick the bad guys out of their country once and for all. Another good thing to do is write your government demand more action and sanctions against Russia or aid for Ukraine.
God bless Ukraine! May the Miraculous Virgin of Vladimir intercede with the Almighty for the removal of Putin, Lavrov, Shoigu and their minions from power and help Ukraine to fight for a just peace. May Putin's evil regime come to a speedy end.
So the Ruble is the value it is because of artificial reasons, but the £££ is the value it is for genuine reasons, and inflation is in reality much higher than the stats show in Russia, but the UK's inflation stats are not fiddled? LOL
Yeah, Russia is experiencing pain for the reasons given. But economics is dynamic, not static. In other words, people collectively forming the economy adapt, innovate, switch and substitute, etc. Take the automotive industry, which was down 97%. It will take maybe 10 years to fully recover. Russia will have to import brands and technology from friendly countries like India, Turkey and Brazil. But production will rebound and over time quality will rise. The important takeaway is the EU will lose permanently on a very lucrative and growing market, while Russia's pain will be temporary.
Putin overestimated himself, like Gaddaffi and Saddam did.
he did wait too long ...and he did try to negotiate with people that want his people gone from this earth
his people are paying for that arrogance
OK. Go cry for Bucha 😂😂
@@curocurovic6675 Nobody wanted Russians gone from the Earth
The west sent their best efforts to _Russia_ when they were unfairly attacked by Hitler. Now they are giving the same favour to Ukraine.
It's Russia that wants to pretend to be a victim, nobody is crying.
No, this Western civilization has not underestimated Russia and the BRICS
Saddam yes but Gaddafi no. What the US, UK, and France did to Libya was as criminal as what Russia is doing in Ukraine.
the title is very wrong
I wish I had invested in the Russian ruble when this proxy war started. I'd be up 30%
Russia already has a major problem. They need to maintain the volume of oil extraction otherwise they need to cap wells. Once capped, becomes an enormous task to uncap if ever needed. Expertise has left. Russia is hiding oil volume stats by installing Kremlin officials in Rosstat. Those volumes are already 50% less, and Russia is scrambling to find enough tankers to keep moving the remaining oil flowing. Besides, Russia is already cannabilising planes to remain in the air. Tough times coming.
im sad for russian people, and even more for ukranian people, sister countries went into a stupid war brings by russia autocratic putin. i really hope ukraine will rejoin the west, and russia move on on their obsolete mindset
This did not age well
Actually IMF issued the report that Russian economy is doing much better than expected, it rose the forecasts on the key indicators.
It’s not doing better than expected … They are looking at indicators like exports and importd… Oil profits are helping them mask other issues like economic collapse … Wait till america starts seizing ships
@@cooldudecs I completely disagree with you, I’m from Russia and observing the situation from within I don’t see any major economical problems here. Unemployment rate is on a historical low, despite some foreign brands withdrew their operations, there are still a huge variety of domestic and foreign brands working in Russia. The shops are stocked up to the roof, prices after initial fear hike are going down, very good harvest of the main crops like wheat and corn, fruits and veggies. One sector which was hit hard is cars manufacturing, but huge work is going on expansion of local brands as well as brands from friendly countries - China, India. Russian business has a huge opportunity for expansion taking market share of the foreign brands that left. Overall, there are no big problems in the economy at the moment, just a couple f issues quite resolvable. That is it.
@@igory3789 your economy is cratering 40% . You can’t push out further than Ukraine because you will be obliterated . America has essentially made you a pariah state… Maybe it’s because u were already super poor to begin with
@@cooldudecs Don’t listen too much CNN type of propaganda, it is absolutely Bs that Russian economy is contracting 40%, nothing even close to that. The lates forecast is better than previous one, the contraction is expected no more than 4-5%.
@Bri Ba You watch american or European msm too much, I recognise brainwashed people immediately based on just one criteria. They don’t listen to people who have in-hand experience and the opposite opinion. You fantasies are quite telling.
Oil PROFITS at all time high, ruble at all time high, they just LOWERED their interest rates. Dude, you are all messed up.
XD Yeah that’s only because the Russians are artificially inflating their currency. Also you forget that the sanctions on Russia mean they have to heavily discount their oil to sell!
🤣!
Its as if you are repeating what another youtube said😂😂
All economies are ultimately measured by debt especially so if that debt increases annually at a ever increasing level.
So how does Russia compare to the US UK and UE let's list the reality check here,
US 30.5 Trillion UK 15 Trillion UE 21 Trillion Russia zero net debt! Yes that's right zero debt.
Whilst the US predominately trades with the EU and UK who all have death defying debt levels. Which means that a collapse is a absolute certainty.
In the last 14 years Russia has run its budget in surplus ( no borrowing) in fact paying off all old IMF loans including Ukraine's.
Whilst in that time the US UE and UK doubled their debts with horrendous borrowing to balance their budgets.
So is this commentators remarks valid absolutely not! It's pure out and out propaganda. And easily qualifies for the clown award. 🤡