ROCKMAN wrote:"Russia is dependent on Europe for goods to keep its population contented." Which also means the EU depends a lot on revenue from sales to Russia. Especially Germany: saw a report that claimed 4,000 German companies did business in Russia. It will be interest to see if Russia and some EU countries begin trading oil in non-US denominated prices as the Chinese intend to do. Given the relative weakness in the ruble these days probably not in Russia's best interest now.
Ulenspiegel wrote: the only conclusion is that Russia is quite unimportant in respect to German exports.
Ulenspiegel wrote:As German I have lived most of my live with tactical nukes next to me.
The basic point is, that Russia's options in a economic war are much more limited because a reduction of NG exports to central Europe are not easy and would be the economic equivalent of a HIC, in which European countries have some ugly options to strike back.
Sixstrings wrote:Anyhow nobody is about making Russia weak
But Russia is european -- they're better than this, or should be.
Anyway, they WILL westernize, and democratize, eventually. It'll be the Russian people that force it.
Putin will be, too. For one thing russians are xenophobic, they dont want to be awash in Chinese, chinese owning these new pipelines, china buying their farmland, it never ends.
If they dont have the West as a hedge then they wont be able to saynno to china sometimes, as Australia is able to
if putin makes big deals with china, you'll suddenly see him making nice with the west.)
Ulenspiegel wrote:Russia already is in danger of sliding into a recession without real actions by her opponents. Something went IMHO wrong.
radon1 wrote:s.The basic point is, that Russia's options in a economic war are much more limited because a reduction of NG exports to central Europe are not easy and would be the economic equivalent of a HIC, in which European countries have some ugly options to strike back.
Don't think Russia (Putin+) are either going to wage an economic war, or are in position to do so. They are simply reacting. Just diversifying their trade.
And how are you going to wage an economic war on Russia? Ban imports of Mercedes? Or deny use of Windows 8?
Russia has already been in recession for quite a while (despite official numbers), talk of "sanctions" helps Putin+ as it provides a bit of excuse for them in the face of the general population.
Ulenspiegel wrote:The transformation of the Russian industry, a cornerstone of a post oil economy still has to happen, here western imput is essential
radon1 wrote:This kind of transformation is never going to happen anyway. How do you imagine this, the Russian industry transforms and starts producing Mercedes and Windows 8? What will the German industry be doing then?
In any event, interesting, how the 55bln USD Chinese deal is going to be implemented. Are they going to do without "the western input", or the western firms will be queuing to get in? May be this is one of the reasons why they are now running various PR campaigns.
AgentR11 wrote:You mean, more obedient to the stated desires of the West. Russia's always danced with Europe and pulled back when they got too close. The Siege of Leningrad taught them what Europeans are like. They have good reason to desire a strong defense against European encroachment.
Its irrelevant to me.
What they will not do, is ever relinquish the Crimea, it is worth trillions of dollars, it is worth the blood of millions. The West forgot that, because its not really all that valuable to us, but, we tried to take it anyway; and it functioned as price discovery. What we learned is that we do not have the capability of applying a price that exceeds even a fraction of the value of the Crimea.
I don't think you quite realize what its like to have a population density as low as Russia. There isn't a lack of farmland in Russia. There's a lack of warm bodies that want to do anything with it; and an even greater lack of warm bodies that want to pay someone else to do something with it. You know what the Chinese are? They are warm bodies that want to pay someone else to do something useful with that farmland/oil/minerals.
I'd say our trustworthiness from their point of view is slightly less than you might have for a sociopathic kleptomaniac.
Its a friggin shell game, and you and those like you in the Western media have bought in totally; even though the ball is in a pocket under the table.
radon1 wrote:Russia's key priority is security.
If the economic arguments fail, then at some point we all (including Germany) may just find ourselves with tactical nukes next door to us. Whom is it going to benefit, except egos of a handful of fool-spectre-dominating grand-chessborders.
ROCKMAN wrote:"I don't think China has fifty billion laying around." Latest stats: Foreign Exchange Reserves in China increased to $3.95 TRILLION USD in March of 2014 from $3.82 TRILLION USD in December of 2013.
...
They might borrow money to finance deals because rates are so low. But they don't have to. They've got over $3 trillion laying around with a few hundred $billion more coming in every year.
Merrill Lynch Says Russia's Gas Deal With China Was A Political Win But A Business Loss
Time To Find $55 billion
What a team of analysts in Merrill Lynch’s Moscow office dislike is that with the celebrations out of the way it’s time to find the $55 billion needed to develop the gasfields and build the pipelines which will supply China.
Even with China providing a $25 billion prepayment to help meet the development cost of the Chayanda and Kovykta gasfields which will supply most Gazprom’s gas to China there will be a need to find another $30 billion from the company’s own sources, or from the Russian Government.
Stagnant Home Markets
“Aside from Ukraine jitters, demand for Gazprom’s gas is starting to stagnate in Europe and Russia,” Merrill Lynch said.
“European storage is full, while the price differential between spot and contractual gas is close to an all-time high.
“In the domestic and FSU (former Soviet Union) markets Gazprom’s sales are down 6% and 1.5% respectively, reflecting sluggish demand and pressure from independent producers.”
What the Merrill Lynch financial analysis answer is the question of which side needed the gas deal most, Russia or China, with the clear answer being that Russia was an eager seller and China a relaxed buyer which means it has almost certainly done best on price.
http://www.forbes.com/sites/timtreadgold/2014/05/28/merrill-lynch-says-russias-gas-deal-with-china-was-a-political-win-but-a-business-loss/
Ulenspiegel wrote:The basic point is, that Russia's options in a economic war are much more limited because a reduction of NG exports to central Europe are not easy and would be the economic equivalent of a HIC, in which European countries have some ugly options to strike back. You have only to check how Russia exports most of its oil.
At the moment one get the impression that Putin is quite good in some secret service operations, but has surrounded himself only with KGB guys who simply ignored the basic economic problems which are biting Russia now: Russia already is in danger of sliding into a recession without real actions by her oponents.
Ulenspiegel wrote:Russia depends on foreign investment and capital, that get lost in an insecure invironment
dissident wrote: So Russia's GDP is seriously underestimated in the official statistics because they have been using an overly high GDP deflator based on a misunderstanding of what constitutes inflation.
Absolutely. "Russia" here means Putin+. But on this occasion, Putin+ security mostly coincides with Russia's general population security; if in doubt - check Ukraine now or Russia in 90s.Sixstrings wrote:PUTIN's priority is HIS security, at home and abroad.
He cannot afford it. Which is a sign that Russia has strong features of a real democracy, at the moment.He wants to do whatever he wants to do at home in Russia.
The specific point was more about machinery exports than about finance. If you are a sales person of a manufacturer, and have a $55 billion project in sight - and, according to Putin, this is the largest construction project in the world currently in place (even before the inevitable overruns) - what is your thought and action then. If you win a contract (or contracts) there, then for the same amount of effort you get way more gain to your realized sales, top line and bottom line than elsewhere. And on this scale, the CEOs are essentially sales persons. If you happen to be in Germany, then you'd presumably be interested in pleasing Putin+ and getting in, irrespective of whether Russia is significant or insignificant for Germany in terms of annual exports.My guess would be that Western financing is let in...
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