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Author Topic: Sanctions On Russia Will Cripple The Economy  (Read 61163 times)

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Offline Orchid

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Re: Sanctions On Russia Will Cripple The Economy
« Reply #30 on: October 14, 2014, 09:48:17 PM »
Russia is falling in very deep and long-term crisis(about 7 years).
Not a big deal. It happened before several times.
Russia used to be separated from the whole world for a century. So, this crisis in not life threatening....
This crisis will affect very rich people. It will be more profitable for them to invest in Russian economy.
Property will be very cheap. It will be time to buy pretty soon.
Middle class will live the same life. They will travel less.
Small business will take advantage of this crisis and will be prosperous without competition with imported products.
Just interesting, how Europe will live without Russian tourists?
Russian market is huge! It is like without bottom!
How the Western world will live without this market?
So, not only Russia is losing money….


Offline WestCoast

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Re: Sanctions On Russia Will Cripple The Economy
« Reply #31 on: October 14, 2014, 11:01:41 PM »
Russia is falling in very deep and long-term crisis(about 7 years).
Not a big deal. It happened before several times.
Russia used to be separated from the whole world for a century. So, this crisis in not life threatening....
This crisis will affect very rich people. It will be more profitable for them to invest in Russian economy.
Property will be very cheap. It will be time to buy pretty soon.
Middle class will live the same life. They will travel less.
Small business will take advantage of this crisis and will be prosperous without competition with imported products.
Just interesting, how Europe will live without Russian tourists?
Russian market is huge! It is like without bottom!
How the Western world will live without this market?
So, not only Russia is losing money….

Russia is not going to be separated from the EU or the world. Russian tourists will still go to Europe. Let's be realistic, how many Russians would prefer to go to Sochi for a summer vacation over Rome or Paris or London? Not too many.

As for the Russian market it is large but UK, France and Germany are all larger and Italy's about the same. Add in the rest of Europe and the European economy is massively larger than Russia, 8 or 9 times larger.

If push comes to shove the EU/Europe will survive without Russia, but will Russia survive without the EU/Europe, by relying on China to help the Russian economy. China looks out for China and China is not nearly as nice as the EU/Europe. 
Ipsa scientia potestas est. Knowledge itself is power.   Sir Francis Bacon

Offline Orchid

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Re: Sanctions On Russia Will Cripple The Economy
« Reply #32 on: October 14, 2014, 11:39:34 PM »

Russia is not going to be separated from the EU or the world. Russian tourists will still go to Europe. Let's be realistic, how many Russians would prefer to go to Sochi for a summer vacation over Rome or Paris or London? Not too many.

As for the Russian market it is large but UK, France and Germany are all larger and Italy's about the same. Add in the rest of Europe and the European economy is massively larger than Russia, 8 or 9 times larger.

If push comes to shove the EU/Europe will survive without Russia, but will Russia survive without the EU/Europe, by relying on China to help the Russian economy. China looks out for China and China is not nearly as nice as the EU/Europe.

China is a very strong Russian partner. You are right that Russia will pay a price for that. (You wrote about it before)
Yes, Russia can live without EU and USA.
Life will be very poor, but people will not complain.
People will not travel because Euro and dollar are very expensive.
It is not only about Rome, Paris or London. It is also Egypt and Turkey, where Russians spend weekends.
These places are going to be empty.....
Russia is big and beautiful, and there are many places to spend vacation.
We have several seas, forests for hunting, rivers for fishing, mountains….
People are not that stupid to throw money in Rome if they can go and see Baikal Lake and hunt in Siberia for the same price.
About market. Just think how much meat, fruits, cars, clothes were imported to Russia!
What all these businesses in US and EU are going to do now?
What are they going to say to their governments?



Offline Orchid

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Re: Sanctions On Russia Will Cripple The Economy
« Reply #33 on: October 14, 2014, 11:49:37 PM »
Looks like I am in really bad mood today, if I am talking about politics and economics.  :laugh:

Offline WestCoast

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Re: Sanctions On Russia Will Cripple The Economy
« Reply #34 on: October 15, 2014, 12:47:19 AM »

Russia is not going to be separated from the EU or the world. Russian tourists will still go to Europe. Let's be realistic, how many Russians would prefer to go to Sochi for a summer vacation over Rome or Paris or London? Not too many.

As for the Russian market it is large but UK, France and Germany are all larger and Italy's about the same. Add in the rest of Europe and the European economy is massively larger than Russia, 8 or 9 times larger.

If push comes to shove the EU/Europe will survive without Russia, but will Russia survive without the EU/Europe, by relying on China to help the Russian economy. China looks out for China and China is not nearly as nice as the EU/Europe.

China is a very strong Russian partner. You are right that Russia will pay a price for that. (You wrote about it before)
Yes, Russia can live without EU and USA.
Life will be very poor, but people will not complain.
People will not travel because Euro and dollar are very expensive.
It is not only about Rome, Paris or London. It is also Egypt and Turkey, where Russians spend weekends.
These places are going to be empty.....
Russia is big and beautiful, and there are many places to spend vacation.
We have several seas, forests for hunting, rivers for fishing, mountains….
People are not that stupid to throw money in Rome if they can go and see Baikal Lake and hunt in Siberia for the same price.
About market. Just think how much meat, fruits, cars, clothes were imported to Russia!
What all these businesses in US and EU are going to do now?
What are they going to say to their governments?

Do you really think Russian people won't complain? As others have mentioned Russians have the Internet and TV shows from all over the world. How many Russians will complain when they see life in Russia getting worse and the oligarchs still living it up abroad? The rich, those not on a sanctions list, will still be able to travel. I doubt they'll be good Russians and stay at home when they can get on their private jet or fly first class to Europe or America or Turkey or Egypt etc.

How many Russians will complain when they see people in Estonia or Poland or Latvia or any one of the other FSU now EU states living much better lives than the Russian people? As has been mentioned before the US does very little trade with Russia, the US won't be impacted much by the loss of Russian trade. The EU will be the deciding factor.

Even in the EU, countries like the Netherlands, which lost a lot of people when MH17 went down, are  leading the pack in insisting on sanctions. Even Germany, the economic powerhouse of Europe and a major trading partner with Russia, has insisted on sanctions. It will be interesting to see which countries continue with the sanctions and which countries drop out and resume trade with Russia.
Ipsa scientia potestas est. Knowledge itself is power.   Sir Francis Bacon

Offline WestCoast

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Re: Sanctions On Russia Will Cripple The Economy
« Reply #35 on: October 15, 2014, 01:06:38 AM »
Something more for the average Russian citizen to consider when looking at the sanctions. According to the article 110 Russian billionaires own 35 percent of Russia’s wealth. In the US the 1%, about 320,000 Americans only own 30% of the wealth in the US. Income inequality is bad in the US. In Russia, it is many orders of magnitude worse.

Just something for the average Russian to consider when they can't afford to go to Europe or even a resort in Turkey or Egypt, yet the oligarchs are flying their private jets all over the world.

http://www.forbes.com/sites/paulroderickgregory/2014/10/14/putins-reaction-to-sanctions-is-destroying-the-economy-and-china-wont-help/
Ipsa scientia potestas est. Knowledge itself is power.   Sir Francis Bacon

Offline Orchid

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Re: Sanctions On Russia Will Cripple The Economy
« Reply #36 on: October 15, 2014, 01:07:16 AM »

Do you really think Russian people won't complain? As others have mentioned Russians have the Internet and TV shows from all over the world. How many Russians will complain when they see life in Russia getting worse and the oligarchs still living it up abroad? The rich, those not on a sanctions list, will still be able to travel. I doubt they'll be good Russians and stay at home when they can get on their private jet or fly first class to Europe or America or Turkey or Egypt etc.

How many Russians will complain when they see people in Estonia or Poland or Latvia or any one of the other FSU now EU states living much better lives than the Russian people? As has been mentioned before the US does very little trade with Russia, the US won't be impacted much by the loss of Russian trade. The EU will be the deciding factor.

Even in the EU, countries like the Netherlands, which lost a lot of people when MH17 went down, are  leading the pack in insisting on sanctions. Even Germany, the economic powerhouse of Europe and a major trading partner with Russia, has insisted on sanctions. It will be interesting to see which countries continue with the sanctions and which countries drop out and resume trade with Russia.

Yes, I do. I guarantee, that Russians will not complain.
It would take long time to explain why. But I know that for sure.
Western world still is afraid of Russia. They see that Russia became rich, powerful and have strong army.
Sanctions will make it weaker, but not much. I think it’s mistake.

Offline Orchid

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Re: Sanctions On Russia Will Cripple The Economy
« Reply #37 on: October 15, 2014, 01:11:16 AM »
Something more for the average Russian citizen to consider when looking at the sanctions. According to the article 110 Russian billionaires own 35 percent of Russia’s wealth. In the US the 1%, about 320,000 Americans only own 30% of the wealth in the US. Income inequality is bad in the US. In Russia, it is many orders of magnitude worse.

Just something for the average Russian to consider when they can't afford to go to Europe or even a resort in Turkey or Egypt, yet the oligarchs are flying their private jets all over the world.

http://www.forbes.com/sites/paulroderickgregory/2014/10/14/putins-reaction-to-sanctions-is-destroying-the-economy-and-china-wont-help/

Statistics is good, but who cares?
Majority of people in Russia want to live decent simple live.
Majority of people in Ukraine want to survive.
Slavery is slavery.

Online andrewfi

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Re: Sanctions On Russia Will Cripple The Economy
« Reply #38 on: October 15, 2014, 03:48:34 AM »
Orchid & Westcoast. Analysysts, for what it is worth are predicting growth in the Russian economy over the next few years and at a rate exceeding both the US and the EU.

The majority of people in Russia want to live a decent simple life and apart from things getting better, that's exactly what they'll get. Don't worry about it. The trajectory of improvement is still very positive.

Sanctions are not making Russia weaker although in the very short term there will be issues most are one-offs. Putin, months ago, was spot on when he noted that the effect of sanctions was to boomerang upon the instigator. That is what we are seeing in the EU - perhaps in a few weeks also in the US when oil shale operations start to close down. When Russia took retaliatory action it had an effect upon Russia and Russians in the form of higher prices and availability of some foodstuffs. That was known, expected and the people were educated, expectations were managed. The same can not be said of actions against Russia where the effects seem to have come as a complete surprise to those in power in the EU and US.

As for market size, Westcoast might want to have a recheck with Google. Google would tell him that at PPP (Purchasing Power Parity - a useful measure that compares GDP in terms of purchasing power rather than an arbitrary external currency) the World Bank now rank Russia as the 5th largest economy in the world, ahead of Germany and all other European countries. In fact with a GNP per capita in excess of $12,616 the same organisation now ranks Russia in the 'High Income' group of countries.

Using raw, but less useful for comparisons, GDP numbers Russia is still behind Germany but that does not reflect relative purchasing power which in turn reflects what people and businesses can buy for their money.

Westcoast might want to go in search of decent primary or secondary sources for his fantasies about inequality. ;) If he did he'd go look at the World Bank data which can be picked up from Wikipedia and a myriad of other places. When he did his research and learning from a source somewhat closer than a bloke writing about a book written by some other person that can't even be checked and where the comparisons are using different bases; indicating an intent to mislead then Westcoast would learn that the Gini Coefficient for Russia in 2009 was estimated at 40.1 and that the same number for the US was 48 in 2014. In truth that's not a whole heap of difference but sure as shit it does not support Westcoast's ill-informed claim.

Westcoast probably does not know that a higher number equates to LESS equality and a lower number is greater equality. The UK by comparison is a very egalitarian 34. ;)

=========================
Worth a read for those interested to learn about inequality: http://en.wikipedia.org/wiki/Income_inequality_in_the_United_States
One note though. The article suggests that the US does not seem to be moving toward a generational wealth holding class system and gives to examples to make the point Bill Gates and Jeff Bezos. Bill Gates' family was wealthy and privileged. Jeff is from a split marriage but his father and family were well to do and his step father did pretty well for himself from immigrant beginnings. Both had a background to encourage later success in a way that poverty does not usually allow for.

Studies have shown that, in the US, Economic mobility is low: movement from poor to rich does not often happen, but from rich to lesser wealth is not so uncommon. Wealth tends to stay with wealth to a greater degree than, for example, Russia or the UK.

"For what else is the life of man but a kind of play in which men in various costumes perform until the director motions them offstage?" -Erasmus

Offline mhr7

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Re: Sanctions On Russia Will Cripple The Economy
« Reply #39 on: October 15, 2014, 08:29:48 AM »
If you look at the most current statistics, you'll see that Russia is still behind Germany and ranked 6th.

This is what the World Bank says about Russia:

Quote
The Russian economy is near stagnation, with continued lowered domestic demand leading to growth of 0.8 percent in the first half of 2014, similar to 0.9 percent in 2013. It was operating on the threshold of recession in the first half of 2014 with quarterly seasonally adjusted growth for the first two quarters close to zero. As a result, Russia’s growth dipped in the first quarter under that of all other relevant comparator country groups. Consumer and business sentiments were already weak in 2013 due to lingering structural problems and contributed to the wait-and-see attitudes of households and companies and leading to a slowdown of the Russian economy to 1.3 percent from 3.4 percent in 2012.

and

Quote
The baseline scenario is one of stagnation with projected 0.5 percent growth for 2014, 0.3 percent in 2015 and 0.4 percent and 2016.

This baseline is paired with two alternative scenarios: an optimistic scenario foresees a small growth recovery to 0.9 percent in 2015 and 1.3 percent in 2016, and

A pessimistic scenario sees the economy slipping into a low-level recession, contracting by 0.9 percent in 2015 and 0.4 percent in 2016.

Is this really better than the US and EU??

http://www.worldbank.org/en/country/russia/overview
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Offline AkMike

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Re: Sanctions On Russia Will Cripple The Economy
« Reply #40 on: October 15, 2014, 09:57:03 AM »
Forty Percent of Russians Don't Know Why Ruble's Value Is Plummeting
The Moscow Times
Oct. 10 2014 20:00
Last edited 20:02

Maxim Stulov / Vedomosti


As Russia's ruble hemorrhages value, more than 40 percent of Russians are unable to explain why the currency is depreciating, even as the majority admit that it is bound to impact their lives, a poll published Friday showed.

The ruble continued its months-long slide on Friday, falling 0.6 percent against the U.S. dollar by evening. The ruble has collapsed more than 20 percent against the dollar this year under pressure from a plunge in oil prices, a strong dollar and Western sanctions over the war in eastern Ukraine.

But when Russian citizens were asked what was behind the currency's fall, 41 percent couldn't provide an answer, a study by state-run pollster the Public Opinion Foundation found.

Of 1,500 respondents, 23 percent blamed United States and European Union sanctions against Russia for pushing down the ruble.

Another 10 percent pointed to the war in eastern Ukraine; 8 percent blamed problems in the Russian economy, which is running close to zero growth this year; and 6 percent said spoiled relations with the West were responsible.

Only 5 percent pointed to the falling oil price. Brent oil was below $90 dollars per barrel on Friday, down from a high of $113 in July.

Nonetheless, a majority of respondents expect to be affected: 41 percent said they believe changes in the ruble exchange rate will have an "acute" impact on their lives, while another 20 percent anticipate a "weak" impact.

The survey was conducted in 100 towns and cities across Russia and had a margin of error not exceeding 3.6 percent.

http://www.themoscowtimes.com/article/509267.html
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Offline Annushka

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Re: Sanctions On Russia Will Cripple The Economy
« Reply #41 on: October 16, 2014, 02:19:58 AM »
Upon my word: tired Western propaganda. You still say that the Russians are swollen with hunger!  :chuckle: Victims of Western sanctions on my avatar.  :ROFL:

Online andrewfi

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Re: Sanctions On Russia Will Cripple The Economy
« Reply #42 on: October 16, 2014, 06:19:07 AM »
Akmike, as we can see from posters here, most people, in most places, do not understand the reasons why macro economic events are occurring. The writer of the article you referenced seems to not have a clear understanding either. The writer attributes a single, recent cause to a long term, ongoing effect - whatever is going on, and not even experts are sure, the article's suggestion is NOT the cause of the decline of the ruble.

I don't know why you posted the article but doing so, assuming that you give credence to the premise underpinning the article (and you did not tell us otherwise) demonstrates that you are no better placed than the people referenced in the article and its author.

"For what else is the life of man but a kind of play in which men in various costumes perform until the director motions them offstage?" -Erasmus

Offline Texan77

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Re: Sanctions On Russia Will Cripple The Economy
« Reply #43 on: October 16, 2014, 09:10:44 AM »
Actually I do not think that the sactions are doing much of anything to Russia. This is just away to pretend we are doing something about the Ukrainian war. What I believe is really hurting Russia is there is a fear in the west that Putin may pull a Manny and start taking Western asset so money is leaving the country. The lower price of oil is also hurting Russian revenue. This is most likely caused because it is too profitable to drill oil over a hunderd dollars a barrel and too much oil is being drilled. Most US producing projects are under $50 per barrel. It would not surprise me if that is not true in many places in the world. Sadis want to keep prices above $80 per barrel which I am not sure they can.

Russia and Europe were going into a recession before the war in the Ukraine and the war did not make it any better. If you want to know who was hurt by the lack of Russian tourist, it is the Ukraine. The majority of Tourist in the Ukraine were Russian mainly in Russian speaking areas. This is causing high unemployment and making the return on rental properties very low. Then the many people escaping the war is making this problem much worse than it other wise would been. Any recession in Russia likely to be very mild compared to the Ukraine.


Online shakespear

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Re: Sanctions On Russia Will Cripple The Economy
« Reply #44 on: October 16, 2014, 09:33:44 AM »
Akmike, as we can see from posters here, most people, in most places, do not understand the reasons why macro economic events are occurring. The writer of the article you referenced seems to not have a clear understanding either. The writer attributes a single, recent cause to a long term, ongoing effect - whatever is going on, and not even experts are sure, the article's suggestion is NOT the cause of the decline of the ruble.

I don't know why you posted the article but doing so, assuming that you give credence to the premise underpinning the article (and you did not tell us otherwise) demonstrates that you are no better placed than the people referenced in the article and its author.

With all due respect Andrewfi, it does not endear you to others when you call the majority of the world ignorant and imply that you alone are brilliant.   
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