Ruble Hits 100 Against the Euro As Currency Collapse Accelerates

[Superboy]

USSR was weakened heavily by the Space program and its free Support it gave to Socialist Middle-Eastern nations which an International element made it more expansive.

I beg to differ. USSR was very powerful. At the moment of dissolution, Tu-160 and Mir were barely operational. Economy has been fake since gold standard was abolished in the 1930s. No country can ever be beaten economically since that time. Third Reich built millions of war machines despite daily heavy aerial bombardment.

 

[Nefer]

China can't replace all the lost markets of the west. China has its own problems with growth slowing down and facing an economic crises with the housing and loan system. I'm afraid Russia played its cards wrong.

You are looking at it way too optimistic. China will keep growing, the size of the middle class has increased and is only starting to settle. Its economy will also spread towards its mainland. the number of scientists china is educating in foreign countries is extra ordinary in comparison with all other nations. Do not underestimate China.

I beg to differ. USSR was very powerful. At the moment of dissolution, Tu-160 and Mir were barely operational. Economy has been fake since gold standard was abolished in the 1930s. No country can ever be beaten economically since that time. Third Reich built millions of war machines despite daily heavy aerial bombardment.

Guess I have to review some data about that era.

 

[Beast]

China can't replace all the lost markets of the west. China has its own problems with growth slowing down and facing an economic crises with the housing and loan system. I'm afraid Russia played its cards wrong.

Slow growth? Which country is not experiencing that now? And many are going into recession. While China still manage to have a 7% and above growth. China is world factory for a reason. It will depend on russia whether they wanted to fully embrace China economy but given the circumstances. I can foresee there are very limited choices and best bet for them now is to tie themselves to China.

Its easier to say then done.

If you do that, you would need to work out many things

Who pays for the drilling and transportation?
Who pays for the connection cost?
What is the.commodity exchange rate?

You can figure out quite easily for the first 2 but the last one is a bit hard. See you can do one of two things, you can either work out a fix rate (say 1 gallon of oil for 10 ton grain) and stick to it forever, but then this will be bad for China because you woukd have to pay for the same quantity of grain regardless of your own demand of oil

Or you are going for a floating rate (Like today it take 10 tons, tomorrow its 12 ton) that would be quite fair to China but not so with Russian as the rate is float, how much the Russian get depents on how much oil Chinese needed. If Chinese demand decrease, Russian will get less grain. And they cant eat crude oil

The barter system only works when 1 side take all, as there are no other solution and i dont see either China or Russia would step down

Tie everything to USD or renminbi. Problem settle. No matter how badly russia is batter. They still got resources needed by China and other world. They will not be dead but suffer only. All those big plan of building aircraft carrier and revamp the armed forces and space all need to be on hold. Stabilize economy and fill its stomach first. Others talk can be done later.

 

[atatwolf]

Slow growth? Which country is not experiencing that now? And many are going into recession. While China still manage to have a 7% and above growth. China is world factory for a reason. It will depend on russia whether they wanted to fully embrace China economy but given the circumstances. I can foresee there are very limited choices and best bet for them now is to tie themselves to China.

Yea, but you are forgetting that China's growth is slowing down with each year quicker and quicker with no change in sight. Soon China will face huge economic problems with no way out because of external factors. China is a world slave factory. That is true but you are not the only factory. There are other third world countries like Indonesia, Thailand and others who have a younger population, better human rights track record and better productivity who are competiting and eventually put you out of business. Local economy of China is non-existent. High poverity and high unemployment. Bad human track record. Authoritarian regime which hinders economic flexibility. The writing is on the wall.

 

[Beast]

Yea, but you are forgetting that China's growth is slowing down with each year quicker and quicker with no change in sight. Soon China will face huge economic problems with no way out because of external factors. China is a world slave factory. That is true but you are not the only factory. There are other third world countries like Indonesia, Thailand and others who have a younger population, better human rights track record and better productivity who are competiting and eventually put you out of business. Local economy of China is non-existent. High poverity and high unemployment. Bad human track record. Authoritarian regime which hinders economic flexibility. The writing is on the wall.

we are fully aware what create us wil harm us back. Cheap labour cost and price cutting. But I can assure you , no other countries has a workforce of such efficient as Chinese. We are fully aware of rapid rising standard of living impact on a manufacturing industries.

Japan is an fine example of too high standard of living which cripple its manufacturing capabilities as compare to Korean. The Chinese and South Korean are learning all the mistakes of Japan and improve productivity and rising the standard of living at a very slow gradual pace. China is still a very favorable investment destination. Lower labour cost compare to western while nearer to consumer base since China is such a huge market. Our taobao 11/11 single day sales demonstrated the superior spending power of our middle class.

Regarding the slow grow of China economy, it all in normal process. A country that hit a 10 trillion mark can't expect a double digit growth after that. It's very normal to have a 7-8% growth rate annually. We will expect even slower growth like 5-6% once we hit the 15 trillion mark. Our growth are still much higher than EU and US.

China is still in line to overtake US in 2020 or 2022 as world number 1 in economy.

 

[jhungary]

Slow growth? Which country is not experiencing that now? And many are going into recession. While China still manage to have a 7% and above growth. China is world factory for a reason. It will depend on russia whether they wanted to fully embrace China economy but given the circumstances. I can foresee there are very limited choices and best bet for them now is to tie themselves to China.


Tie everything to USD or renminbi. Problem settle. No matter how badly russia is batter. They still got resources needed by China and other world. They will not be dead but suffer only. All those big plan of building aircraft carrier and revamp the armed forces and space all need to be on hold. Stabilize economy and fill its stomach first. Others talk can be done later.

You probably misunderstood my point. Simply saying, tying Rouble with USD (Already did) and RMB would not help. In fact, if Rouble was tied to RMB, it would actually hurt RMB value.

Think of it like this. If you tie Rouble to RMB, where the exchange rate is more or less fixed. Problem is, Russian currency is depreciating like crazy, that mean in order to stop the depreciation, Rouble would need to print more money. Now, if China ties RMB to Rouble, and Rouble keep printing, basically that would mean Russian can literally buy RMB in the infinite. Basically, in layman term, it would mean the Russian is using their toilet paper to exchange for real money of RMB.

Hence I said, the only way China can help Russian is by buying some of their debt (Bond) but if Rouble keep depreciating, would China buy into their debt?

Trading resource is the same thing, bear in mind Russia only have Oil and Natural Gas as their natural resource, so literally whatever Russia buy from China. So, everything from Food to Clothing to Electronics. That's heck a lot of oil they will need to pump. Okay, even if Russia agree on Chinese Price, they can only pump oil to pay for whatever they need from China, and the law of supply and demand kicks in. If Russia keep pumping oil, then their oil would become worthless as they would flood the market and China cannot take on oil forever only needs oil as long as Chinese need them. At some point when the need and reserves have been filled China would not need oil from Russia Anymore. and if that happens, you are going back to square one.

You are right about one thing tho, no amount of sanction can destroy one's economy, but sanction can literally turn Russia into North Korea. The world is too big and the world can ignore Russia as a market, but Russia cannot stand to ignore the world and only trade with China, or Iran for that matter.

 

[cirr]

No Russia is not dead , its true that sanctions are hurting ordinary Russians but Russian military is on high alert and expanding themselves in Arctic region. Soon we will see drilling in Arctic region by Russian companies.

The so-called sanctions have an extremely limited role in the current mess。

The plunging oil price is one factor，lack of sound economic and financial policies another，and manipulation by the speculators a third。

 

[jhungary]

How about: He is really dumb ? Good explanation on precious metals, but do not expect our man to admit he is wrong and clueless about the subject.

lol, don't expect him to, let the Russia sort them out when they have to ask all the Russian Lady to hand over their gold jewellery lol, see how that goes

 

[Special Delivery]

China is still in line to overtake US in 2020 or 2022 as world number 1 in economy.

The U.S. and her allies will balance out China's economic influence. China has no friends with deep pockets.

 

[cirr]

This tiny storm in a tea cup will pass over in a year or two and Russia will still be what it has always been。

Russia of 1998 was worse。The US of 2007-2008 was much worse。

So what？

 

[Beast]

The U.S. and her allies will balance out China's economic influence. China has no friends with deep pockets.

Why would China need allies with deep pocket when her pocket is the deepest? Even the so called US allies are actively working with Chinese in economic area to increase their shares on China market. Does it head butt you that China rising?

 

[Special Delivery]

Why would China need allies with deep pocket when her pocket is the deepest? Even the so called US allies are actively working with Chinese in economic area to increase their shares on China market. Does it head butt you that China rising?

We profit immensely from China's economic rise. But the correlation between Chinese economic power and it's ability to counter American influence has not manifested and will not in the future because you need friends.

 

[Beast]

You probably misunderstood my point. Simply saying, tying Rouble with USD (Already did) and RMB would not help. In fact, if Rouble was tied to RMB, it would actually hurt RMB value.

Think of it like this. If you tie Rouble to RMB, where the exchange rate is more or less fixed. Problem is, Russian currency is depreciating like crazy, that mean in order to stop the depreciation, Rouble would need to print more money. Now, if China ties RMB to Rouble, and Rouble keep printing, basically that would mean Russian can literally buy RMB in the infinite. Basically, in layman term, it would mean the Russian is using their toilet paper to exchange for real money of RMB.

Hence I said, the only way China can help Russian is by buying some of their debt (Bond) but if Rouble keep depreciating, would China buy into their debt?

Trading resource is the same thing, bear in mind Russia only have Oil and Natural Gas as their natural resource, so literally whatever Russia buy from China. So, everything from Food to Clothing to Electronics. That's heck a lot of oil they will need to pump. Okay, even if Russia agree on Chinese Price, they can only pump oil to pay for whatever they need from China, and the law of supply and demand kicks in. If Russia keep pumping oil, then their oil would become worthless as they would flood the market and China cannot take on oil forever only needs oil as long as Chinese need them. At some point when the need and reserves have been filled China would not need oil from Russia Anymore. and if that happens, you are going back to square one.

You are right about one thing tho, no amount of sanction can destroy one's economy, but sanction can literally turn Russia into North Korea. The world is too big and the world can ignore Russia as a market, but Russia cannot stand to ignore the world and only trade with China, or Iran for that matter.

You are thinking too much on to the future. Russian talk about now and not too much about what happen next. Overcome the current crisis and plan later. Russia oil can supply China expansion by at least 20 years. The Russia needs to make full use of these 20years time to find a solution once their resources depleted. And yes, you are correct that they need to pump their oil as much as possible to exchange our goods or loan.

The only real empty vessel will be countries without anything to offer. Russian can count themselves lucky they have plenty of natural resources. Russian is not like Argentina. They are still in a much better position.

We profit immensely from China's economic rise. But the correlation between Chinese economic power

It more like Chinese profit more from others in the economic development rather than they profit more from us.

If not, how can we rise from a poor country to world number 2 in economy in 30years time. And we are not very far away from US. China is 3/5 of US whole.

 

[jhungary]

You are thinking too much on to the future. Russian talk about now and not too much about what happen next. Overcome the current crisis and plan later. Russia oil can supply China expansion by at least 20 years. The Russia needs to make full use of these 20years time to find a solution once their resources depleted. And yes, you are correct that they need to pump their oil as much as possible to exchange our goods or loan.

The only real empty vessel will be countries without anything to offer. Russian can count themselves lucky they have plenty of natural resources. Russian is not like Argentina. They are still in a much better position.

Lol, this is not going to be 20 years. The supply and demand will alter once Russia start pumping Gas to pay for everything.

You don't need to wait for the oil in Russia to be depleted to feel the different. Simply because of 2 basic reason.

1.) Not only Russia is pumping oil, the world is also pumping oil too. A slight upset with Russian oil would mean oil worldwide would depreciate. In the end, you need to ask yourselves this, oil is oil, you want to get it from the ME for some real value? Or you want to get it from Russia for simply exchange?

2.) Russia also need their oil. Pumping oil is not like you think, it's not just open the tab like turning on the water tap and you can have as much oil you can from it. There is a lot of procedure to follow, you will need to refine it, you will need to transport it and you will need to maintain those oil well. There is a limit how much each oil rig can produce per day. And after that, it would be dangerous to do so.

If Russia is using their oil as a sort of currency to buy Chinese Stuff, they would have to withdraw their own use in order to guarantee a linkage price, otherwise China would find themselves getting less and less oil for the same product they are giving to Russian. I don't think China would want this

 

[Beast]

Lol, this is not going to be 20 years. The supply and demand will alter once Russia start pumping Gas to pay for everything.

You don't need to wait for the oil in Russia to be depleted to feel the different. Simply because of 2 basic reason.

1.) Not only Russia is pumping oil, the world is also pumping oil too. A slight upset with Russian oil would mean oil worldwide would depreciate. In the end, you need to ask yourselves this, oil is oil, you want to get it from the ME for some real value? Or you want to get it from Russia for simply exchange?

2.) Russia also need their oil. Pumping oil is not like you think, it's not just open the tab like turning on the water tap and you can have as much oil you can from it. There is a lot of procedure to follow, you will need to refine it, you will need to transport it and you will need to maintain those oil well. There is a limit how much each oil rig can produce per day. And after that, it would be dangerous to do so.

If Russia is using their oil as a sort of currency to buy Chinese Stuff, they would have to withdraw their own use in order to guarantee a linkage price, otherwise China would find themselves getting less and less oil for the same product they are giving to Russian. I don't think China would want this

True. China will flock to whoever offer the best price and Russian needs to match it. Now that is more of a Russian problem than Chinese problem. We just need to wait and see how the things will unfold at the moment. But I do not think a collapse for Russia is possible.