Well, I’ve much more to say about this and I will in later posts. But, I’m tired, today. So I’ll just jot a few lines.
Russian economy shrank 4.6 percent in Q2 on lower oil prices
MOSCOW (AP) — Official government figures show that the Russian economy was 4.6 percent smaller in the second quarter than the same quarter the previous year in the wake of plummeting oil prices and Western sanctions.
The sharp quarterly decline reported Monday by the country’s state statistics agency is more than double the 2.2-percent contraction recorded in the previous quarter.
The Russian economy is in recession for only the second time in President Vladimir Putin’s 15 years in power as a result of the slump in oil prices, the country’s main currency earner, and Western sanctions over Moscow’s involvement in the crisis in Ukraine.
Meanwhile, the Russian currency dived again Monday, falling below 64 rubles a dollar. The ruble’s woes over the past year have helped fuel inflation and hurt consumer demand.
That’s a pretty significant contraction. And, it doesn’t seem there’s much of an end in sight, until Russia changes their economic model. They will at some point and time in the future, we just don’t know when.
Personally, I believe the days of $100/barrel is over……. that is to say, unless the US and Canadian governments move to artificially thwart production of our resources of hard oil. Canada added a tax to the area where they extract their hard oil. It’s hurt the companies engaged there.
The difference between the US and Russian economies is that the US feeds people and therefore can industrialize properly. The importance of the Ukraine to Russia isn’t a port. It’s a huge expanse of arable land. Most of the land east of the Urals doesn’t produce much of anything.
With China’s economic woes and Brazil’s ….. Russia should combine with them to have some sort of economic union, along with India, who is entirely dependent upon energy imports to maintain and grow, to compete with the US dollar. That’ll prolly work!!!
There is no real free enterprise without real liberty. I’m not saying the US has much of any of that today, but, I will say Russia, China, and Brazil have less.
suyts space 
If it is true that Russia’s economy shrank 4.6% in the last quarter then they at least have the advantage of knowing about it. How much did the US economy change during the same time period? I would say that we don’t know. The figures put out by our official government sources are so untrustworthy that no one (or at least no one that I know) believes a word of them. Unemployment? Inflation? National deficit? Projected growth? The only certainty is that whatever the real figures are, the last place to look for them is from the economists paid to give us whatever answer they are requested to give.
We all know that the official sources lie to us about the climate. We also know from experience that they lie about the economy.
Well, yes, that’s true, as well. But, I also assume the reported GDP of Russia is using the same idiotic formula as we are. (They are.) You see, economists don’t have to lie as much as they used to, they simply redefined what GDP means. The difference is I believe Russia understands the relative meaning. While people in the US believe 1% growth today means the same thing as it did 30 years ago.
Hey James, you make some good points. Anyone here remember when the reported figures were for “GNP gross national product”? Unlike GDP, the GNP included a correction for the trade deficit. It was not just how much we produced, but whether we were exporting more than we imported. Then we started buying more imports than we were exporting (we were consuming more and producing less) so instead of fixing the economy they just changed the metric and pretended everything was fine.
Yes, I remember! The GNP is still calculated and you’re correct about the switch. But, the GNP is less significant because of the idiotic international business laws we now have. Back when, most of the US businesses made and produced their stuff in the US. Now, they can be anywhere, doing anything, and it still reflects in the GNP. Of course, with the trade imbalance we have, yeh, no one wants to look at the GNP.
Personally, I haven’t been able to set a good gauge on foreign owned companies engaged in producing in other nations. That is to say, how much should be weighted to a Mitsubishi company manufacturing in the US? Sure, there’s jobs and paychecks staying in the US, but, the profits go back to Mitsubishi, and the same for US companies doing this in China and elsewhere. Which is entirely different than a US company making their wares and selling their wares in the US, which is different than a US company making their wares here and selling them abroad. But, then, ownership creates a stockholders (mutual funds) question.
I’ve written a couple of posts about the GNP, but, it’s been a while. But, it does cause me to think about how we can look at both and all their factors and create a good metric for our economic health.
From the article
“The Russian economy is in recession for only the second time in President Vladimir Putin’s 15 years in power as a result of the slump in oil prices, the country’s main currency earner, and Western sanctions over Moscow’s involvement in the crisis in Ukraine.”
Which kinda makes me wonder, who takes the USA’s Victoria Nuland (neé Nudelman) to task for her and 5 bn USD’s involvement in the CREATION of the Ukrainian crisis; the ousting of an elected president and the theft of about 40 tons of Gold.
You do hopefully realize that forcing the EU vasall states to wreck THEIR economies with the sanctions doesn’t help the US Empire to gain any credibility. I’m tempted to say, ,stick a fork in it, its done, but we have to expect a last ditch crazy nuclear cataclysm as that Empire refuses to die. So that’s why we let it die very slowly.
I know, Dirk. I can only pray we get someone sensible in power soon.
DirkH
Which kinda makes me wonder, who takes the USA’s Victoria Nuland (neé Nudelman) to task for her and 5 bn USD’s involvement in the CREATION of the Ukrainian crisis; the ousting of an elected president and the theft of about 40 tons of Gold.
Thanks for the above.
I have often wondered why so few people acquaint themselves with the facts. Russia could have been a full partner if sensible decisions by the west had been made. For example a membership in Nato would have been a great partnership builder. Instead we have had constant undermining of all things Russian. We reap what we sow, and a real price will be paid down the road!
“I have often wondered why so few people acquaint themselves with the facts. ”
It’s easier to live in the mainstream cocoon (until it isn’t anymore).
Looks like, in Rubel (vs USD), there’s not much of a change for Russia.
https://www.comdirect.de/inf/indizes/detail/chart.html?timeSpan=5Y&ID_NOTATION=31117979#benchmarkNotations=10963605&benchmarkNotations=8381958&benchmarkColors=3366cc&benchmarkColors=006633&selectedBenchmarks=false&selectedBenchmarks=true&fromDate=11.01.2014&timeSpan=range&e&
Now… Russia devalues the Rubel by direct oil “backing”; China starts to devalue their Yuan…
USD shoots up (relatively) due to its INVERSE correlation to the oil price (the Kissinger deal)…
So who’s going to win the export markets…
Australia should be devaluing the Aussie Dollar. Let’s see.
https://www.comdirect.de/inf/waehrungen/detail/uebersicht.html?SEARCH_REDIRECT=true&REDIRECT_TYPE=ONLYONE&SEARCH_VALUE=USDAUD&REFERER=search.general&ID_NOTATION=8381843
Check.
Whither Fed? Feel like tightening still?
Heh! Yeh, I don’t expect much tightening to come. But, let them devalue. If that’s China’s response to their current crisis, then it means they’ve given up on being anything other than an export nation, dependent upon other nations currencies.
While there was a bug huzzah in media and Western stock markets, it was a pretty tiny adjustment. Given that the Yuan was pretty much chained to the short-squeezed USD (which is short-squuezed because the derivatives stabilizing USD against oil have collapsed) such an adjustment seems smaller than I would expect. 20% would be more like it.
CNY in USD, in percent scale:
https://www.comdirect.de/inf/waehrungen/detail/chart.html?timeSpan=5Y&ID_NOTATION=1343320#rel=true&e&
Lately Putin has been burning cheese.
Hungry Russians aren’t amused apparently.
“The move has sparked widespread criticism in a country where an estimated 20 million people live in poverty and memories of devastating starvation, including during the siege of Leningrad in thw Second World War, remain strong. ”
Well isn’t it funny that the Guardian doesn’t mention that Russian standard of living was never higher.
The Russian mentality is to gather around their leader when feeling threatened.
I think reports about Russians giving a crap about a few tons of cheese are PsyOp fairytales by CIA-controlled shitrags.
At the same time the Guardian promotes more illegal immigration to Europe.
http://www.breitbart.com/big-journalism/2015/08/11/uk-guardian-prints-pro-immigration-advert-we-welcome-you-say-no-to-the-governments-scare-tactics/
Not that that’s anything unusual in the EU; but it’s another small sign that the Guardian is part of a CIA-controlled Color Revolution strategy for the EU.
And here’s the group that “paid” for the advert.
https://www.facebook.com/pages/Velkommen-til-flygtninge-Nej-til-St%C3%B8jbergs-skr%C3%A6mmekampagne/1004040489619586?sk=photos_stream
Looks like the same NGO-as-fifth-column strategy that was used in Ukraine.
Bruce, I read a story about that, and almost posted on it. It’s a bizarre move. Russians had already bought the food. I get the retaliatory sanctions, but, that didn’t harm anyone other than the people who owned the food and the people who would have bought the food. There’s probably an untold side-story to this ….. or the Russian government is in trouble and flailing about.
“Russians had already bought the food. ”
The NKVD snatched cheese from the hands of grannies leaving the supermarket and threw it on a burning pile?
Probably the grannies said, oh, those NKVD guys are wussies these days.
“Who’s there?” “Open the door. NKVD. The neighbour says he smells Emmentaler.”
No, but, the Russian businesses did. Competitors to Putin?
Hey James. If the measurement is done in USD, with the Ruble devaluation frankly speaking I am surprised it is not showing more.
I tried to find some numbers showing the GDP. Found this:
http://www.tradingeconomics.com/russia/gdp
Yes, trading economics is a great source! I’ve used it several times in the past. The measurement is in USD. But, we’ve got to remember, the US Fed reserve has just printed $trillions of USD, so, we’ve still that which lowers the value of the dollar. See today’s economic post!