Ukraine - Russia Conflict
- Thread starter randomradio
- Start date
Do you enjoy the slow motion shipwreck of the russian economy? Do you like seeing russia rightfully becoming a pariah nation, respected less than even North Korea? I do. I think the coming crash of the russian economy will be even worse than the one that ended the Soviet Union.
- 2994.2 Billion Rubles during May
- 860 [Billion] Rubles during June
Also it was 3274.9 billions during June last year. So it's a deliciously huge drop.
So russia is losing all the foreign investment. Either nobody believes in russia's future anymore, or the sanctions are keeping foreign investors away, or russia is self-sabotaging (again) by preventing foreigners from investing in russian bonds. Probably a combination of these three factors.
The economic situation continues to deteriorate. The Ministry of Finance has lost access to some of the export duties that it was previously able to gain income from due to the incredibly bad margins in those industries. For example coal had the their export duties suspended.
The government has tried to reduce spending where possible so they can continue to fund the war and prices continue to skyrocket due sanctions, high transportation costs, and labor shortages.
Those budget cuts are becoming more obvious now.
- The high cost of lending due to the high key rate
- The government reducing or eliminating many of the government subsidies to programs like preferential lending
- The government taxing any industry it deems “too profitable”
- Reduction on government spending large projects
All of these things are really beginning to show the consequences. Some of the things we have discussed previously have only gotten worse. For example, Russian agriculture equipment sales are plummeting. They simply cannot afford them without the preferential lending.
Which the government can’t really afford anymore. And many of the farmers are struggling to even afford fertilizer due to the skyrocketing costs of…everything, and all the policies the Russian government enacted to both take the profit to fund the war, AND flood the domestic market with low cost food thereby manipulating the inflation rate. In addition, the massive labor shortage and the policies that drive migrants OUT of Russia causes the price of labor to go up.
Putin told everyone they could solve the labor shortage through mechanization. But instead, he has fostered a situation where the labor shortage gets worse AND the industries selling mechanization are unprofitable.
Master strategist
“The volume of machinery production decreased by 7.4%, to 161 billion rubles, exports - by 25.2%, to 9.5 billion rubles. Deputy head of Rosspetsmash Denis Maksimkin says that the dynamics of production and shipments continues to deteriorate. According to the results of the first six months, he recalls, the volume of production decreased by 4%, shipments to the domestic market - by 10%, and exports - by 20%.”
That mean the customer has no choice but to pay the higher prices AND the government has a new revenue source
: 
But it also means the foreign competitors may leave. Of course none of this solve the problem of being able to afford it.
: But it also means the foreign competitors may leave. Of course none of this solve the problem of being able to afford it.
We’ve talked about how the high key rate and the government’s reduction of subsidies is causing problems. This next part is a good example of that.
“The association also cites the exhaustion of limits under the 1432 program (discounts for farmers on equipment) and the low profitability of agricultural producers who are postponing the renewal of agricultural equipment.”
We keep seeing this
Russia will postpone replacing/purchasing something until suddenly the industry that provides that good/service closes and thus isn’t available to provide the good/services.
AND/OR
They suddenly need to replace everything in amounts that exceed the industries capacity.
“The Ministry of Industry and Trade reported at the end of July that additional funding could be allocated for Program 1432 “if there are sources” in the budget.”
But the priority for Russia is to spend that money of missiles to destroy Ukraine’s infrastructure!
“Alexander Altynov says that the current period of falling demand has been observed for a year and a half already, and such a protracted decline has not been seen before.”
Ever?
“He notes that there are no drivers on the market that could improve the situation this year: "Usually, by August-September, sales at the end of the season are already visible."”
Some people are beginning to understand how bad it’s getting
“A possible increase in prices for agricultural products - for example, due to problems with the harvest - will at best support demand at the current level, he adds.”
But not if they can’t afford that, they may just go bankrupt instead.
“As Mr. Altynov predicts, this year the revenue of agricultural machinery dealers in Russia may decrease for the first time in annual terms.”
Yup! Bad!
And this is not a unique situation, you’re seeing this repeat in all sorts of areas!
And there is NO SIGN that any of this will improve! (Where are those silly people who say Russia’s economy is doing great pointing at GDP & World Bank data?)
