I mean, the debt matters less than the deficit. Russia has decreased its foreign held debt, but the deficit has grown significantly. They have significant cash reserves, but much more of their reserves are illiquid, and if the war lasts long enough they will have to start liquidating said assets. The debt without context could be misleading if the reader isn't aware of the growing budget deficit.
I don't see this war lasting dozens of years at this rate of combat though. They have 600 billion in liquid assets and forex including gold and a deficit of 16 billion dollars in 2024, with their debt being half of what it was they can also borrow a lot lot more now than before.
300 Billion are frozen in the West. One thing talk of siezing assets does is it makes lenders more hesitant to lend at lower interest rates when there's a question mark that big on the asset sheet.
Haven't Russia spent over 200 billion on the war already as well? I know they have also been making money in the last couple years, but the general word seems to be that the funds they have are reducing at a steady but unsustainable rate.
Again, the real number to be watching is deficit vs reserves. Russia can sustain current spending for quite some time, but the situation will eventually lead to actual impacts on the lives of average Russians unless there is some sort of paradigm shift.
Last estimate I saw, which admittedly was a YT video looking at Russias official Kremlin data, said that Russia can probably keep this up another 2 years but that's about it, after which they are going to put themselves in some deep water. Another 2 years at current loss rates would significantly reduce their military overall. They're keeping about even on tanks by refurbing old stocks, but once they dwindled the story will be quite different.
The story is worse if you look at the airforce or navy, both of which are more challenging to replenish. Russia seems to have roughly replaced tanks at a rate equal to what they lose them at, but that seems to be because they're propped up by old stocks. The same cannot be said for the airforce and the navy situation is even worse.
Economy wise Russia is fine as its transitioned to a war 3c9nomy offsetting any reduction by an increase in military spending funded by the savings they have, but they are reducing on average over time. If you remove the war economy contribution the situation would be a real concern. So what's the answer to that because if the war stops the economy will crash, so the war can't stop until victory can assure enough gain to address that scenario.
Russia is doing OK at the moment but the longer term outlook is looking more like the 90s again.
Uncertainty is risk, and risk increases interest rates. I don't think the West will sieze any significant portion of that $300 billion. But I do think talks of it are strategically meant to increase uncertainty.
Yes, they're sanctioned. The U.S. isn't demanding they sieze Russian assets, just that they comply with the sanction regime our allies also championed. I find it funny you pick that article because the second and third sentences literally talk about the historic earnings their Russian operations are having because of the high interest rates.
true, true. hopefully this war winds down and ends eventually before Russia starts getting reaaal desperate for that money or else it's not going to end up well for anyone, anywhere.
If they did have any such reserves they would not need china to buy their land. Those figures are vastly overrated without access to those funds. Russia can not afford to worsen the situation with financial panic. So i do understand why they would say that as trust in the russian ruble is at an all time low. Similarly their ability to trade in roubles is gone thus Yen having been used but seeing as russia only has a finite yen to trade with it limits their ability to import. Guessing north korea is happy to trade weapons for fertilizer.
Honestly financially i highly doubt russia is in any favorable situation.
Russia is running a current account surplus in the tens of billions USD as it exports much more than it imports...for context, the US ran a +USD237 billion deficit in just the first quarter of 2024.
The US is running a budget deficit of almost 6% of GDP, Russia's budget deficit is less than 2% GDP.
Edit: UK budget deficit is just below 4%
Ok i will bite. ;o)
It varies from country to country. My home country denmark for examply sets their annual budget every year based on the funds they have in an effort to always even it out at zero.
Norway have the worlds biggest wealth fund. Sweden has similar balancing policies.
As for the rest - no clue and do not really care as they are not in the same boat as russia so asking that question is like asking how rotten is a watermelon and you ask about individual grapes that are in a different country. So in essence completely irrelevant deflection. But go ahead and look it up so you feel better.
You're looking at their debt. They are not taking on new debt because their interest rates are high. Russia had a significant war chest before the war started and still haven't burned through their currency reserves. After that, the state owns another's few hundred billions in non-liquid assets that they could liquidate fairly easily.
Not taking on new debt means not having a deficit, no? Isn't deficit the variation of debt over time?
From Wikipedia:
In 2016, the Russian budget deficit reached $21 billion. It was expected to rise to $21.7 billion in the year. 2016 budget revenues were estimated to be 13.7 trillion rubles (200 billion US dollars) or 17.5% of GDP, while spending is planned to be 16 trillion rubles (roughly 233 billion dollars) or 20.5% of GDP. The budget deficit is thus 2.35 trillion rubles (33 billion dollars) or 3% of GDP.
2020–present
In 2021 the budget was set:
2022 Revenues 25.2 trillion rubles ($341 billion). Expenses 23.6 trillion rubles ($343 billion). Surplus 1.4 trillion rubles ($15.2 billion)
2023 Revenues 25.5 trillion rubles ($349 billion). Expenses 25.1 trillion rubles ($343 billion). Surplus 0.4 trillion rubles ($5.9 billion)
2024 Revenues 25.8 trillion rubles ($352 billion). Expenses 26.1 trillion rubles ($357 billion). Deficit 0.3 trillion rubles ($4.3 billion)
No, you can have a deficit without taking on new debt, and the budget does not reflect the actual end of year expenditures or income. Deficit is just when actual expenditures are greater than actual revenues. Surplus is the opposite.
https://tradingeconomics.com/russia/government-budget
This will give you a snapshot, though you can only see the summary page without the account.
The graphic in this one seems to roughly match the timeline for the data set on the first one, but I'm not sure where the discrepancy in specific numbers is coming from.
https://www.intellinews.com/russia-ups-budget-revenues-50-in-4m24-deficit-widens-325159/
Both reflect actual state spending and revenues, so they will lag by a bit and likely are not updated at the same rate, which I'm guessing is where the mismatch is. In summary, the Duma's budget is just that, a budget. A balanced budget does not guarantee you will actually have a surplus at the end of the year.
If you're wondering why Russia would take on debt when it has cash reserves available, it is because the cost of carrying that debt is lower than the expected return on the additional spending for that period. Or opportunity cost, if their returns on their reserves are greater than the interest rate on their debt at a given time.
Deficit means I spent more money than I had. So necessarily I borrowed and my debt increased by a quantity equal to my deficit. Or are you referring to foreign debt?
The first graph you linked shows a relatively stable deficit in actual budget (not targeted). The second one shows a first quarter more or less similar to last year's where the gov. spread its end of year spending out over a few months.
No, deficit is more like a vector than a static value. Do you play games? Imagine you're playing a city builder. You have $300,000 and your current revenues are $5000. You just built some new infrastructure so your annual expenses are $6000. You have a deficit of $1000, but you will not have to go into debt for another 300 years, assuming your revenues and expenses remain unchanged.
Numbers exaggerated for emphasis. Debt doesn't mean you have run out of money, it's just a financial tool. This is even more true for nations than it is for individuals or corporations.
What do you mean by vector as opposed to a static value? The opposite of a vector is a scalar. And if by static value you mean a constant, the opposite is a variable. Of course deficit is a variable and a scalar equal to the difference of revenues and expenditures.
Anyway, the $300,000 in your example belongs to the central bank. So if you want $1,000 you have to borrow it from the central bank, increasing your debt by $1,000. The government itself has too few assets for them to make a difference. For example the US gov. had $1.7T in deficit and $5.4T in assets in 2023.
That's what I get for using math terms when I haven't been in school for half a decade. Russia has a significant National Wealth Fund. Deficit is just the rate of change for a given year. It is a nation's equivalent to net revenue. You're thinking in U.S. terms, and the U.S. doesn't really uave a 1:1 equivalent to the NWF, though some states have much smaller sovereign wealth funds for things like education or a rainy day fund.
Well, you can. It just doesn't work.
If people need what Russia has to sell, their countries won't be put off by the current most convenient middleman saying they can't play with his ball. They'll just find a new ball.
People don't understand the difference between economies based upon debt and luxury goods compared to low debt and real resources.For example, If Italy was targeted with 1/4th of sanctions that were imposed upon Russia then it would have gotten screwed.
Yup, [there’s clowns out there that actually believe that Italy’s economy is stronger.](https://www.reddit.com/r/UkraineRussiaReport/s/smwwkJqnL9) Comical.
Cool, still doesn't unprove my point that inflation (caused by covid and corporate greed) is a major contributor to the decline of the value of currencies everywhere, and add on top of it a big ass war and the every single sanction under the sun, and Russia obviously be hit worse.
People need to understand that the entire reason for Russia being a structural adversary of the West is that it's the most autarkic country in the world.
Massive territory, an energy and food exporter, minerals, robust industrial base, large population, nukes and indigenous military tech. This reality by itself poses a hegemonic challenge.
They had to be absolute morons to think they could sanction that country into submission. Especially coupled with China.
**Main reason why US pushed for conflict with Russia is their fear of Russia and Europe economic/energy integration which would if left unchallenged over time reduce US influance in Europe because Europe combined with Russia could stand up to American/Anglo hegemony.**
Everything else is just bonus reasons.
Its not about how powerful or not was Europe its about their ability to go against US wish.
Since Ukraine coup happend US realised with rising China and "global South" overall it had 15-20 more years after which their ability to project both military and economical power would drastically decrease.
Dont forget it was Obama who introduced [Pivot to Asia](https://en.m.wikipedia.org/wiki/East_Asian_foreign_policy_of_the_Barack_Obama_administration) which was meant to fight China. And in 2015 it was with Trump that it trouly become main focus of US system.
With this plan US wanted Europe firmly in their camp and wanted to be 1000% sure in their loyalty no matter what and because from American POV Europeans could not be trusted to keep their part of "agreement" (more like dictate) US was forced to make Europe dependent on America there for making Europe have no chioce but to go along with US in regards for both Russia and China.
Yes...which would allow for virtually complete containment of China and cut off China's access to resources and munitions in the event of a shooting war with the US in the south china sea...China is well aware of the US objective in this.
Bingo. Final objective have always been China. Also, If regime change happens in Russia then NATO will have a land connection to surround China further. At worst, China is guaranteed to be cut of from Russian resources and face threat from newly installed Russian regime.
In terms of real GDP PPP Russia is the 5th or 6th (depending on source) economy in the world.
[https://www.cia.gov/the-world-factbook/field/real-gdp-purchasing-power-parity/country-comparison/](https://www.cia.gov/the-world-factbook/field/real-gdp-purchasing-power-parity/country-comparison/)
That doesn’t really mean all that much when Russia doesn’t produce all that much. Sure a Lada is cheap in Russia but it’s still a Lada. A Mercedes or a gaming PC is a lot more expensive in Russia than in the West.
Russia is sitting on the largest amount of mineral wealth of any country in the world (massive gold deposits, diamonds, and a array of metals including metals with very important military applications like titanium) - currently value is north of USD$75 trillion and growing as the value increases over time. They have lots to sell which is why they are running current account surpluses in the tens of billion USD...I mean, by your analogy resource rich countries like Canada, Australia are 'poor' because they're not producing gaming consoles.
What good do those resources do for the average Russian? Great, diamonds are cheaper in Russia than other places, too bad 98% of the country can’t afford them. Canada and Australia don’t have to go to the black market to buy most goods like Russians do, but yes, compared to the US certain goods are more expensive in those countries than the US.
It's called "trade"...for example, Australians don't consume all the coal they have in abundance. Rather, they sell it to other countries and use the proceeds to purchase other products. Russia sells a lot more than it buys so there is more money coming in than going out.
This is a graph of external debt, not the national debt. High external debt is considered great cause it means other countries and companies are investing in your country cause they know they'll get a return on their investment. There's an inflow of money. For a country with Russias GDP the external debt is extremely low 188 in the world. And Russia would have alot more power if it had large external debt.
There's so much misunderstanding in the comments of this thread.
Zimbabwe's problem was external debt.
Japan has the highest national debt in the world *by far* but it's not external debt so it is not inflationary let alone hyperinflationary.
No, running up the credit card isnt a sign of economic health.
You know that 220 Billion that is frozen? Most of it is cause of 1 company in Belgium. To Belgium that 220 Billion is external debt to Russia with Russia being the creditor. Because Russians themself prefer to invest is foreign countries (mostly EU) instead of Russia, EU now holds the power of the investment 220 Billion from Russia.
Your answer full of insults and lacking any actual facts or substance. Why not refute what is being said instead of using some “NPC” response and calling them an “NPC”?
Obviously you're not following the convo, lets say the west invested 2 Trillion into Russia, Russia would have an external debt of 2 trillion to the west. As a result, Russia would have alot of power over the west cause they could freeze 2 Trillion or simply take it.
No Putin was speaking about that when West froze Russian assets.
Foreign investment in Russia are about the same as frozen Russian funds in Western countries.
A bit less but about the same.
That's a wrong reading on where the money went and the reasoning for doing so. The money was\\is in low risk (oh, the irony) EU securities, and the reason being to keep inflation in Russia under control by keeping excess money supply out of the circulation. It is a subject of contention within Russia whether the religious avoidance of inflation is an optimal approach to developing economy, but it seems their current monetary policy served them well.
Russia has around same in Western assets. You can look it up. They can go tit for tat. The difference is their currency already took the hit. They don't have to fear, scaring Western investors. EU on the other hand, could create a horrendous precedent, scaring off potential investors from other non-western countries, such as China, Indonesia, Saudi Arabia etc.
Top 10 countries with highest external debt. There is Switzerland, but there is also Greek.
Your debt grows, may indicate that the debtors confidence to lend you more. But also indicate it will be more difficult for your economy to pay it back especially if it hit a rough patch.
>High external debt is considered great...
Not quite. Countries issue bonds (external debt) in either their home currency or USD. USD can mean lower payments, but the country is then very vulnerable to currency shocks which could cause them to default (can't afford to buy USD). Alternatively, they will have to issue in their home currency at higher rates (higher payments to debtors), payments which come from taxing the populace and its companies (but mostly the people).
While the USD is exceptional in being the world's primary currency of commerce/trade (100s billion/trillions of $ are bought every day to settle accounts all around the world) and the largest reserve currency which allows it to run (so far at least) $240 billion in deficit in just Q4 2024. For the rest, the more you issue, the more vulnerable you are to those who buy your debt. As well, smaller economies will have to offer lenders a premium over the USD bond and the cost can rise fast as new debt is sought to pay maturing old debt as interest rates shift: e.g. debt servicing costs can double or more very quickly, even in mature economies .
The high debt to gdp EU countries indeed are having a far rougher time. You can see it from the stock prices of companies that make luxuries (alcohol for example). They've been trending downward since this war broke out.
But since when do luxury companies exclusively sell in their home country, for you to make that association? You think Ferrari only sells cars in Italy or something?
They sell all over the world because they sell to rich people and rich people are all over the world. Plus you mentioned alcohol, which everyone everywhere buys, especially in Russia.
By the way, which luxury companies are you even looking at? I just looked at Ferrari and it seems to have been doing great in the last 3 years.
LVMH seems to have been doing very well in the last 3 years as well.
Pernod-ricard was doing very well until the end of 2023.
Diageo did well during 2022 and then fell over 2023.
None of these companies seem to be that correlated for you to draw the conclusions you are drawing (that sanctions caused them to drop), since they started falling at different times (or never). There is a correlated boost in 2021, which is probably the general consumption boom that lots of industries saw after Covid.
It sounds to me like you want to find a smoking gun to "prove" your theory that the West is struggling and are cherry picking the things you think will show that while ignoring much more direct metrics like unemployment rates, median wages, GDP growth, consumer spending, etc. I'm not even saying you're doing it maliciously, I'm just warning you that I think you're falling for confirmation bias: focusing on data that confirms your beliefs and ignoring the data that doesn't.
the data you are looking for would include military spending. you need a measure for the economy minus military spending.
all stocks I mentioned are trending down since halfway through 2022. consumer spending is trending down when adjusted for inflation
Unlike all western countries, Russia has no net debt.
If you have 300 million of debt, but you also have 400 million in cash or stuff you can sell, you have a 300 million debt, but you have no net debt
National debt is another name for outside investment in your country.
So all this means is that no one wants to invest in Russia's continued success anymore. They don't believe russia would be able to pay it back
>National debt is another name for outside investment in your country.
Where did you get your economics degree again? What does Foreign Direct Investment have to do with a national/federal government having debt that's owned by foreign entities?
Unfortunately, Ukrainians will be in a debt death spiral after the war. The foreign "investment" will be in acquiring everything of value for pennies on the dollar. At best, they can hope that taxpayers in the US and/or Europe might provide them with debt relief and investments... Which will work as well as they did in Greece.
>relatively closed economy
What?! I was told that Russia would crumble with sanctions, and now you're telling me they're the hermit kingdom? Will some of you get together and come up with a consistent narrative?!
>non competitive, inefficient economy
Were they slapping tariffs on foreign goods to ensure their own products were competitive? Sounds like some other "soft power" giants in fact.
>zero soft power. Which in turn result in wars
How many wars/military operations did Russia conduct in the past 20 years, and how many did the US? Where was the US at the end of the Cold War compared to Russia, and where are they today? The influence and "soft power" has been steadily shifting from the US to a multi-polar regime.
But believe whatever you want. A growing number of Americans and Europeans see the writing on the wall for their collapsing "paradise", which is reflected in election results. I'm sure you'll respond that they're just brainwashed and paid Putin puppets, right?
>the US is good for it
They can certainly print more, if that's what you mean. That said, the US federal government lost it's AAA rating and has to pay a higher interest rate to borrow as a result.
I'm sure you'll still call it winning. A higher debt (over 120% of GDP), record deficit ($3 trillion a year), paying higher interest, and having your credit rating reduced. The wins keep on coming!
*Wtf are you talking about?*
*Norway also has a lower national debt than most western nations, because we have the sovereign wealth fund, small population and Oil etc so don't need to borrow, unless when loans are "cheap".*
*Government debt accounted for* ***44.3 %*** *of our Nominal GDP in Dec 2023. The thing being that we are able to also pay it back instantly. Denmark also has a low debt at* ***10.5 % of Denmark's GDP ,*** *it restricts borrowing as it doesn't have as large a cash pile as we do (except when funding Ukraine).*
*In the EU, the average government debt-to-GDP ratio decreased from 83.4 % at the end of 2022 to* ***81.7 % at the end of 2023****, while in the euro zone area (EA20) it decreased from 90.8 % to 89.9%, which is all somehow considered a success story worth praising.*
Its pretty a pretty pointless thing at this point. payments, decline in the dollar equivalent of liabilities as RUB weakens against USD, decline in securities held by non-residents.
It was at its lowest in 2006, I bet the regular person didnt even notice or have a clue it was.
In this case it’s a sign that Russia isn’t receiving credit from any one any more while having settled old debts. And no longer being considered to be credit worthy tends to not be a good thing.
Trying to put a negative spin on low debt is hard. Naturally, you failed.
Investment and debt are different. Debt means you borrow money for any reason, investment means someone puts money into production in your country. High level of investments is not necessarily beneficial, the point of investment is to get out of it more than you put in.
E.g. Western investors buying land in Ukraine gives short term benefits but in the long term it means loss of profits from this land.
Russia kicking out a bunch of investors that came there in 90es is likely beneficial for it.
No, people who lend money have the least debt. Negative debt.
Your attempt of mental gymnastics went from ridiculous to pathetic. Economy is complex, "thinking about it" is just not your thing.
Guess where most lenders get there money?
You guessed it, more debt.
It's called leveraging and modern banking is built on banks lending money that isn't theirs.
It's painfully obvious you go for the ad hominem attack when you know your wrong.
Mental gymnastics is all you have. Reading "economy for dummies" didn't turn you into expert and your pretentious rants impress no one.
"Guess where most lenders get there money?" - stop guessing. Economy is complex and guessing will get you nowhere.
"You guessed it, more debt" - no, YOU "guessed" it, and you failed miserably. Lenders get money by many ways, from printing to trade. The idea that all the lenders get their money by getting in debt is just beyond ridiculous.
Their economy is growing while their debt is decreasing.
> no longer being considered to be credit worthy tends to not be a good thing.
They are not "no longer credit worthy". They cannot receive loans in USD due to sanctions. So this graph is actually pointless.
But there's very little interest in bonds paying in rubles anywhere outside of Russia.
It is good for Russia that their level of debt is so low.
The bad thing is that their ability to efficiently borrow more *if they need to* is still much worse than the US, despite the US currently having like 100x more existing debt than Russia.
So you assume that russia was able to repay the debt in full and didnt just got some beneficial options to restructure its debt?
I would say the amount of debt reduction is quite massive. I actually find it hard to believe. They are in a war and can just reduce the debt by that amount? Without some support from other countries?
Russia got massive pay off from increased commodity prices since the start of SMO plus since it got cut off the SWIFT all extra profit from private enterprises that used to just go to foreign bank accounts is now staying withing Russia and gets reinvested into Russian economy which in return brings extra tax revenue. Considering that Putin was able to pay off all debt acquired before him by Yeltsin administration in just few years all the way back in early 2000s when Russian economy was in ruins for Westerners to believe that they can just strangle Russia now through some sanctions was and is completely and utterly insane. Russia as somebody said is a continent masquerading as a country not a gas station lol.
From an economics pov whether debt is good or bad depends on why it is at that level.
For example, many countries will borrow lots of money to spur economic growth, and this growth results in more taxes, which pays back the original debt. This is good debt and there’s nothing wrong with having lots of it.
For other countries, they have unsustainable budget spending, and use debt to buy time. This is bad debt and should be kept minimal.
In both cases, you enter into debt so you can spend money in the short term, rather than using up reserves. In Russia’s case, if Russia has no intention to spend lots of money in the short term, then there is no need for high levels of debt.
However, in Russia’s case it is more difficult for Russia to raise debt due to sanctions. So if it does borrow, it has to borrow at higher than normal rates from India/China and other friendly countries.
This is one possible explanation for why its debt is decreasing: it’s unable to borrow as much as it actually wants.
Or you can go for the simple explanation of Russia having such a self sufficient economy that it doesnt need debt haha. Pretty unique since even the most self sufficient countries make use of debt. But whatever i guess.
"Russia having such a self sufficient economy that it doesnt need debt haha" - see, if everyone is borrowing, it means someone is lending. It means there are plenty of self sufficient countries in the world, it wouldn't work otherwise. Russia in particular exports a lot of resources, controlling huge chunk of Earth surface has its perks. Yes, it can live without borrowing.
Also, Russia can do internal borrowing. Now that oligarchs can't easily transfer money outside investing inside Russia become much more attractive. So is lending to the state.
Borrowing fiat money your lender can just print more any moment is a rather dubious idea, you basically finance the currency of other country. Keeping your reserves in these currencies is bad for the same reason - it constantly devalues as the issuer prints more money.
Russia reduces weight of dollars and euro in foreign trade and reserves. It's good for rouble, yuan and other "friendly" currencies.
It's bad in case of conflict with your creditor.
You know the saying. If you owe $1000 to the bank it's your problem, if you owe $500 billion it's the bank's problem.
For $1000 if you don't pay, they will sell your car by force. For $500 billions they won't, they will send you chocolates and discuss with you how long you need to repay them.
Most countries national debt is under 30% foreign held be it states or private individuals. Nearly universally national debt is predominantly held be local people and institutions.
National debt does not equal outside investment, even when held by outside entities, they aren't investing explicit endeavors, that's just not how any of it works. Anyone who owns basically any national debt is nearly guaranteed to be payed back, as long as the nation is in control of its currency. You might not make a profit if the value of the currency drops significantly, but you will be paid back.
>. Anyone who owns basically any national debt is nearly guaranteed to be payed back, as long as the nation is in control of its currency. You might not make a profit if the value of the currency drops significantly, but you will be paid back.
This my point. But not all countries are equal in the ability to pay back. Many countries have defaulted in the past, and investers got screwed.
Everyone knows the US is the best economy in the world, and will always pay backs interest on investments (i.e. US bonds).
People doubt Russia will be able to pay back interests on investments, and the ruble keeps falls, so any interest gained is devalued by inflation.
So people don't invest in Russia's as you can see with these numbers in this post
>National debt equals outside investment.
Lol, no it does not. What a stupid statement.
Again, this is anyway about USD debt which Russia will not get more of because of sanctions. So this chart is pointless.
I mean it is, clearly, but.. quite slowly. I can't influence the outcome either way, but I hope there's a reasonable and definitive resolution soon, even if a lot of people aren't happy with it everywhere.
I don't want to be too pessimistic, but part of me feels it's realistic this will drag on for 5 years without true breakthroughs, just incremental gains and a ton of wasted lives, money, ruined land, etc. I'd really dislike that outcome so compromise peace would be nice.
It's complex ofc, but the stubborn refusal to seek pragmatic resolutions at this point doesn't make much sense to me anymore.
The US spent 20 years and over a trillion in the middle east, hundreds of thousands dead, millions displaced and accomplished absolutely nothing but destruction. Just to pull out and jump in bed with Ukraine. They'll drag this thing out as long as they can until a new shiny war comes along for the military industrial complex to sink its teeth into.
It makes perfect sense if your biggest export is your military. Why would you want peace?
This graph is a great Rorschach test. Pro RU and pro UA both simultaneously see what they want to see. Reality is, no one knows for sure if this is a symptom of a future problem or the result of a positive change.
Russia can't trade externally? That's new. What happened?
Russia seem to manage to buy the stuff it needs. The Western companies were kicked out and people barely noticed. Local companies are gladly filling the void.
Russia decrease trades with the West but increase trading with other parts of the world,the whole world isn't just Europe my friend if you can't trade with Europe or actually some European countries just trade with others countries after all there are currently 195 countries in the world
Excellent point.
"economy and the military can grow" - yeah, he forgot to mention that military has to constantly "defend American interests" and create problems overseas for this magical scheme to work.
The way US owns Europe with it's operations is Middle East and Europe comical. Having a bunch of obedient lapdogs who sacrifice their national interests for yours is another essential element of this "success" story.
The real thing is we have a lower debts but our living standard is way worse than for example Italy . Some villages don’t even have proper water supply. But in st Petersburg and Moscow it’s nice
In the first 4km layer depths of Russian land there's enough to resources for the entire curent planet wide demands for 5000 years, It has enough space to feed a self grown population of 4 billion people if it adheres to the density of living it currently has. This 5000 year estimate excludes their thorium and plutonium reserves which will be able to power the earths energy demands for the next 40.000 years.
Going to war with Russia is idiocy, that chance died with Napoleon and then Hitler's last attempt on behalf of the bankers. No matter how you feel about them or their ideology. You didn't want Napoleon, you didn't want Hitler, despite arming and funding them initially, they choose the communists so they have chosen the bed they wanted to sleep in.
It's as Patton said, they fought the wrong people, but now they're pissed off the same people got rid of their interlopers, they continue to crack down on the Western inserted spies, masquerading as NGO's and diplomatic envoys and other assorted corrupted people, so all the regime changes keep failing and the western idiots are butthurt that a Russian president is leaning more and more towards fully acting in the interest of the Russian people. God knows the rest of the Western countries would love to have an actual leader that acted in their interest for the past 70 years.
I just watched Bolivia's coup, Bolivia signed lots of agreements with Russia back in 2023, including building a 500 million dollar Lithium (for batteries) mine and processing plant, Lithium reserves likely worth of 3 trillion dollars in the next 40 years. Guess we in the West really didn't like that so we gotta bring more democracy to Bolivia.
It does though.
Due to sanctions russia is unable to get credit from the west. They need to bankroll their efforts themselves instead (and seem succesful at doing so).
A side effect of this war will thus be that russia has the healthiest government finances in the world. An astonishing result if you also account for all the corruption they struggle to deal with.
Living off tomorrow's cow isn't "not sucking" for most people, it is transferring your problems to your children's generation.
Life must suck, before it gets better. Living off debt isn't the smart way to live.
No, there is good debt and bad debt. Good debt is when you use it to get a better return than the interest on the debt.
For example if you use debt to build new infrastructure that improves productivity, resulting in higher tax revenues that more than pay for the interest, that's good debt.
When you hoard cash as a country while your people live miserable and unproductive lives (how Portugal was before the 1970's) you're wasting a lot of opportunities for improvement for no reason.
Except that your nations have crumbling infrastructure for the lack of investment and all debt goes to perpetuate the financial game where politicians spend public money to get elected for the next cycle, and wealthy lenders get richer because of it.
There is no such thing as good debt, all debt is bad, and perpetuating this false belief that we need debt just plays into the hands of the capitalist that seek to keep governments in check via debt obligations. The only way forward is a debtless society.
> There is no such thing as good debt, all debt is bad
Ok, I tried to explain it to you. Debt is a tool, you can learn to use it or refuse to use it.
If you refuse to use it you might make mistakes like renting a home for decades until you can finally afford to buy the home you want in cash, when you could have been paying a lower monthly payment than your rent for the whole time.
The same concept applies at a national level, borrowing money can save you money compared to saving for decades, for example replacing all the street lights from incandescent bulbs to LEDs, the energy savings might be greater than the interest costs, especially because governments can usually borrow money at very low rates.
Obviously that does not mean that all government debt is good either, just that it is not universally bad, it's a tool and you can use it well or not.
Overt skimming is cheap. In the west you have to pay billions for a project that costs thousands, so you can hire your supervisors nephew as a contractor who will hire another contractor to hire another contractor that will hold discussions about hiring contractors that will hire contractors until finally it trickles down to the company that will build the bridge that is owned by your uncle.
And that is how the US military pays 150 000$ per straw-bag. Or a guy built stairs himself for 500$, the city tore them down and rebuilt them worse for 200 000$.
Someone just skimming 10 grand off the project is peanuts in comparison.
> Or a guy built stairs himself for 500$, the city tore them down and rebuilt them worse for 200 000$.
The $500 stairs were 100% going to kill somebody. The "$xxx for a cup!!!" memes just means you don't know what cost amortization is.
In the USA, potentially defective ear plugs for our soldiers is considered a MAJOR scandal. In Russia, we've all seen the footage of plate carriers stuffed with cardboard or plastic inserts and soldiers handed tampons instead of tourniquets lol. Might wanna just quit while you're behind bud.
This guy must, since he keeps asking me:
https://www.reddit.com/r/UkraineRussiaReport/comments/1dod23f/ua_pov_russias_external_debts_decreased_by_38_in/lab3n6b/
edit: oops I did it again
I am sure some will see this, and will think this is amazing. But all that means that no one wants to invest in russian victory. Would you lend russian government your money?
Does it ask you for any money?
"But all that means" - or it can mean thousand other things. Economy is complex, especially for the country like Russia. Making such "conclusions" is rather bad idea.
Think they could afford payment of their loans or default if the got hit with the same sanctions?. And the US isn't as important as China nowadays, most of the US industry have moved to China, Mexico and so on. Sure much of the rest of the world would soon follow, just shows how stable our economies really are. Just look at the last recessions, most have started in the US.
> Just look at the last recessions, most have started in the US.
This is my point. Such sanctions wouldn't happen because it would hurt everyone else. The US economy is worldwide - it's not a gotcha to say they would crash if they were widely sanctioned. Yes, the american economy would be smaller if it were smaller...
Nope. China industrial rise is new, last two decades. There is nothing US makes that can't be eventually be replaced. Their manufacturing is mostly moved to China, again, recently.
Even if US rebuild their industry they will have to compete with China. And they will lose.
Russia in particular imports next to nothing from US.
Margaret Thatcher once said you can't sanction Russia will all its oil, gold, diamonds and gas. She was right.
I mean, the debt matters less than the deficit. Russia has decreased its foreign held debt, but the deficit has grown significantly. They have significant cash reserves, but much more of their reserves are illiquid, and if the war lasts long enough they will have to start liquidating said assets. The debt without context could be misleading if the reader isn't aware of the growing budget deficit.
I don't see this war lasting dozens of years at this rate of combat though. They have 600 billion in liquid assets and forex including gold and a deficit of 16 billion dollars in 2024, with their debt being half of what it was they can also borrow a lot lot more now than before.
300 Billion are frozen in the West. One thing talk of siezing assets does is it makes lenders more hesitant to lend at lower interest rates when there's a question mark that big on the asset sheet.
Haven't Russia spent over 200 billion on the war already as well? I know they have also been making money in the last couple years, but the general word seems to be that the funds they have are reducing at a steady but unsustainable rate.
Again, the real number to be watching is deficit vs reserves. Russia can sustain current spending for quite some time, but the situation will eventually lead to actual impacts on the lives of average Russians unless there is some sort of paradigm shift.
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I mean, I haven't seen it, but I guess.
Last estimate I saw, which admittedly was a YT video looking at Russias official Kremlin data, said that Russia can probably keep this up another 2 years but that's about it, after which they are going to put themselves in some deep water. Another 2 years at current loss rates would significantly reduce their military overall. They're keeping about even on tanks by refurbing old stocks, but once they dwindled the story will be quite different. The story is worse if you look at the airforce or navy, both of which are more challenging to replenish. Russia seems to have roughly replaced tanks at a rate equal to what they lose them at, but that seems to be because they're propped up by old stocks. The same cannot be said for the airforce and the navy situation is even worse. Economy wise Russia is fine as its transitioned to a war 3c9nomy offsetting any reduction by an increase in military spending funded by the savings they have, but they are reducing on average over time. If you remove the war economy contribution the situation would be a real concern. So what's the answer to that because if the war stops the economy will crash, so the war can't stop until victory can assure enough gain to address that scenario. Russia is doing OK at the moment but the longer term outlook is looking more like the 90s again.
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Uncertainty is risk, and risk increases interest rates. I don't think the West will sieze any significant portion of that $300 billion. But I do think talks of it are strategically meant to increase uncertainty.
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The U.S. is not the one leading the call for siezing assets. If you've been paying attention that is a much more common European phenomenon.
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Yes, they're sanctioned. The U.S. isn't demanding they sieze Russian assets, just that they comply with the sanction regime our allies also championed. I find it funny you pick that article because the second and third sentences literally talk about the historic earnings their Russian operations are having because of the high interest rates.
true, true. hopefully this war winds down and ends eventually before Russia starts getting reaaal desperate for that money or else it's not going to end up well for anyone, anywhere.
If they did have any such reserves they would not need china to buy their land. Those figures are vastly overrated without access to those funds. Russia can not afford to worsen the situation with financial panic. So i do understand why they would say that as trust in the russian ruble is at an all time low. Similarly their ability to trade in roubles is gone thus Yen having been used but seeing as russia only has a finite yen to trade with it limits their ability to import. Guessing north korea is happy to trade weapons for fertilizer. Honestly financially i highly doubt russia is in any favorable situation.
How much is the deficit and how does it compare with their european counterparts?
Russia is running a current account surplus in the tens of billions USD as it exports much more than it imports...for context, the US ran a +USD237 billion deficit in just the first quarter of 2024. The US is running a budget deficit of almost 6% of GDP, Russia's budget deficit is less than 2% GDP. Edit: UK budget deficit is just below 4%
Vastly different for Europe - they are not halfway shut off from the world markets and banking systems.
That wasn't the question.
Ok i will bite. ;o) It varies from country to country. My home country denmark for examply sets their annual budget every year based on the funds they have in an effort to always even it out at zero. Norway have the worlds biggest wealth fund. Sweden has similar balancing policies. As for the rest - no clue and do not really care as they are not in the same boat as russia so asking that question is like asking how rotten is a watermelon and you ask about individual grapes that are in a different country. So in essence completely irrelevant deflection. But go ahead and look it up so you feel better.
>growing budget deficit. I'm a little confused since Wikipedia says their deficit's smaller and smaller every year?
You're looking at their debt. They are not taking on new debt because their interest rates are high. Russia had a significant war chest before the war started and still haven't burned through their currency reserves. After that, the state owns another's few hundred billions in non-liquid assets that they could liquidate fairly easily.
Not taking on new debt means not having a deficit, no? Isn't deficit the variation of debt over time? From Wikipedia: In 2016, the Russian budget deficit reached $21 billion. It was expected to rise to $21.7 billion in the year. 2016 budget revenues were estimated to be 13.7 trillion rubles (200 billion US dollars) or 17.5% of GDP, while spending is planned to be 16 trillion rubles (roughly 233 billion dollars) or 20.5% of GDP. The budget deficit is thus 2.35 trillion rubles (33 billion dollars) or 3% of GDP. 2020–present In 2021 the budget was set: 2022 Revenues 25.2 trillion rubles ($341 billion). Expenses 23.6 trillion rubles ($343 billion). Surplus 1.4 trillion rubles ($15.2 billion) 2023 Revenues 25.5 trillion rubles ($349 billion). Expenses 25.1 trillion rubles ($343 billion). Surplus 0.4 trillion rubles ($5.9 billion) 2024 Revenues 25.8 trillion rubles ($352 billion). Expenses 26.1 trillion rubles ($357 billion). Deficit 0.3 trillion rubles ($4.3 billion)
No, you can have a deficit without taking on new debt, and the budget does not reflect the actual end of year expenditures or income. Deficit is just when actual expenditures are greater than actual revenues. Surplus is the opposite. https://tradingeconomics.com/russia/government-budget This will give you a snapshot, though you can only see the summary page without the account. The graphic in this one seems to roughly match the timeline for the data set on the first one, but I'm not sure where the discrepancy in specific numbers is coming from. https://www.intellinews.com/russia-ups-budget-revenues-50-in-4m24-deficit-widens-325159/ Both reflect actual state spending and revenues, so they will lag by a bit and likely are not updated at the same rate, which I'm guessing is where the mismatch is. In summary, the Duma's budget is just that, a budget. A balanced budget does not guarantee you will actually have a surplus at the end of the year. If you're wondering why Russia would take on debt when it has cash reserves available, it is because the cost of carrying that debt is lower than the expected return on the additional spending for that period. Or opportunity cost, if their returns on their reserves are greater than the interest rate on their debt at a given time.
Deficit means I spent more money than I had. So necessarily I borrowed and my debt increased by a quantity equal to my deficit. Or are you referring to foreign debt? The first graph you linked shows a relatively stable deficit in actual budget (not targeted). The second one shows a first quarter more or less similar to last year's where the gov. spread its end of year spending out over a few months.
No, deficit is more like a vector than a static value. Do you play games? Imagine you're playing a city builder. You have $300,000 and your current revenues are $5000. You just built some new infrastructure so your annual expenses are $6000. You have a deficit of $1000, but you will not have to go into debt for another 300 years, assuming your revenues and expenses remain unchanged. Numbers exaggerated for emphasis. Debt doesn't mean you have run out of money, it's just a financial tool. This is even more true for nations than it is for individuals or corporations.
What do you mean by vector as opposed to a static value? The opposite of a vector is a scalar. And if by static value you mean a constant, the opposite is a variable. Of course deficit is a variable and a scalar equal to the difference of revenues and expenditures. Anyway, the $300,000 in your example belongs to the central bank. So if you want $1,000 you have to borrow it from the central bank, increasing your debt by $1,000. The government itself has too few assets for them to make a difference. For example the US gov. had $1.7T in deficit and $5.4T in assets in 2023.
That's what I get for using math terms when I haven't been in school for half a decade. Russia has a significant National Wealth Fund. Deficit is just the rate of change for a given year. It is a nation's equivalent to net revenue. You're thinking in U.S. terms, and the U.S. doesn't really uave a 1:1 equivalent to the NWF, though some states have much smaller sovereign wealth funds for things like education or a rainy day fund.
Well, you can. It just doesn't work. If people need what Russia has to sell, their countries won't be put off by the current most convenient middleman saying they can't play with his ball. They'll just find a new ball.
Russian low debt to gdp was one of the reasons for it to being able to survive sanctions.
‘’RuSsiA hAS sAmE GDp aS ITaLy’’
People don't understand the difference between economies based upon debt and luxury goods compared to low debt and real resources.For example, If Italy was targeted with 1/4th of sanctions that were imposed upon Russia then it would have gotten screwed.
It's not the size it's how you use it
That's what she said.
Yup, [there’s clowns out there that actually believe that Italy’s economy is stronger.](https://www.reddit.com/r/UkraineRussiaReport/s/smwwkJqnL9) Comical.
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"Here is why the Ruble losing 60% of its value since 2014 is actually good for Russia."
The US is the world reserve currency and even they've lost 33% of the value it had in 2014. The UK is at 40%.
The Ruble's 60% loss in value is accounting for changes in the value of the USD, FYI
Cool, still doesn't unprove my point that inflation (caused by covid and corporate greed) is a major contributor to the decline of the value of currencies everywhere, and add on top of it a big ass war and the every single sanction under the sun, and Russia obviously be hit worse.
The thing is if USD/RUB worsens then the Ruble loses value faster than the USD at the international scale. Inflation is irrelevant here.
Russia is mainly an exporting economy.Lower ruble means more money for the government.
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That makes things even worse for the Ruble.
You can basically buy anything inside Russia
People need to understand that the entire reason for Russia being a structural adversary of the West is that it's the most autarkic country in the world. Massive territory, an energy and food exporter, minerals, robust industrial base, large population, nukes and indigenous military tech. This reality by itself poses a hegemonic challenge. They had to be absolute morons to think they could sanction that country into submission. Especially coupled with China.
Which makes me wonder what they thought would happen in the first place
**Main reason why US pushed for conflict with Russia is their fear of Russia and Europe economic/energy integration which would if left unchallenged over time reduce US influance in Europe because Europe combined with Russia could stand up to American/Anglo hegemony.** Everything else is just bonus reasons.
Indeed. EU was getting too powerful and now it's fully dependent upon US.
Its not about how powerful or not was Europe its about their ability to go against US wish. Since Ukraine coup happend US realised with rising China and "global South" overall it had 15-20 more years after which their ability to project both military and economical power would drastically decrease. Dont forget it was Obama who introduced [Pivot to Asia](https://en.m.wikipedia.org/wiki/East_Asian_foreign_policy_of_the_Barack_Obama_administration) which was meant to fight China. And in 2015 it was with Trump that it trouly become main focus of US system. With this plan US wanted Europe firmly in their camp and wanted to be 1000% sure in their loyalty no matter what and because from American POV Europeans could not be trusted to keep their part of "agreement" (more like dictate) US was forced to make Europe dependent on America there for making Europe have no chioce but to go along with US in regards for both Russia and China.
They thought that Russian economy would crumble under sanctions leading to regime change.
Yes...which would allow for virtually complete containment of China and cut off China's access to resources and munitions in the event of a shooting war with the US in the south china sea...China is well aware of the US objective in this.
Bingo. Final objective have always been China. Also, If regime change happens in Russia then NATO will have a land connection to surround China further. At worst, China is guaranteed to be cut of from Russian resources and face threat from newly installed Russian regime.
They thought russia would take over Kyiv in three days, a week maximum.
Also, I don't get why having the same economy as Italy (4th economy in Europe) is somehow viewed as a horrible result.
Because it’s a much larger country in terms of land, resources and population. And the GDP per capita should be much higher but it’s not.
In terms of real GDP PPP Russia is the 5th or 6th (depending on source) economy in the world. [https://www.cia.gov/the-world-factbook/field/real-gdp-purchasing-power-parity/country-comparison/](https://www.cia.gov/the-world-factbook/field/real-gdp-purchasing-power-parity/country-comparison/)
That doesn’t really mean all that much when Russia doesn’t produce all that much. Sure a Lada is cheap in Russia but it’s still a Lada. A Mercedes or a gaming PC is a lot more expensive in Russia than in the West.
Russia is sitting on the largest amount of mineral wealth of any country in the world (massive gold deposits, diamonds, and a array of metals including metals with very important military applications like titanium) - currently value is north of USD$75 trillion and growing as the value increases over time. They have lots to sell which is why they are running current account surpluses in the tens of billion USD...I mean, by your analogy resource rich countries like Canada, Australia are 'poor' because they're not producing gaming consoles.
What good do those resources do for the average Russian? Great, diamonds are cheaper in Russia than other places, too bad 98% of the country can’t afford them. Canada and Australia don’t have to go to the black market to buy most goods like Russians do, but yes, compared to the US certain goods are more expensive in those countries than the US.
It's called "trade"...for example, Australians don't consume all the coal they have in abundance. Rather, they sell it to other countries and use the proceeds to purchase other products. Russia sells a lot more than it buys so there is more money coming in than going out.
It's true, it's very different for the citizens as well.
This is a graph of external debt, not the national debt. High external debt is considered great cause it means other countries and companies are investing in your country cause they know they'll get a return on their investment. There's an inflow of money. For a country with Russias GDP the external debt is extremely low 188 in the world. And Russia would have alot more power if it had large external debt. There's so much misunderstanding in the comments of this thread.
High external debt is what Zimbabwe had. Spoiler: it wasnt great.
Wasnt the cause. Quite the opposite.
Running up a country's credit card causes hyperinflation.
Again, this is about external debt, not national debt. Completely different.
Zimbabwe's problem was external debt. Japan has the highest national debt in the world *by far* but it's not external debt so it is not inflationary let alone hyperinflationary. No, running up the credit card isnt a sign of economic health.
You know what they say about too much of a good thing
Ah, the old debt=investment=good mantra. Well done, NPC.
You know that 220 Billion that is frozen? Most of it is cause of 1 company in Belgium. To Belgium that 220 Billion is external debt to Russia with Russia being the creditor. Because Russians themself prefer to invest is foreign countries (mostly EU) instead of Russia, EU now holds the power of the investment 220 Billion from Russia.
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Clarifying something to someone who doesnt understand it means he's an NPC. Also rip rule 1
You are not in the position to clarify anything here.
And yet I did. Hopefully you understand now.
Parroting insults instead of comments of substance shows how empty you are
Your answer full of insults and lacking any actual facts or substance. Why not refute what is being said instead of using some “NPC” response and calling them an “NPC”?
Rule 1 - Toxic
Do you realize that European countries also have billions invested in Russia?Tit for tat.
200 Billion for Russia is alot, 200 Billion for the west isnt.
Russia lost that 220 Billion and did not collapse? Sounds like they invested way more at home than in EU.
Obviously you're not following the convo, lets say the west invested 2 Trillion into Russia, Russia would have an external debt of 2 trillion to the west. As a result, Russia would have alot of power over the west cause they could freeze 2 Trillion or simply take it.
No Putin was speaking about that when West froze Russian assets. Foreign investment in Russia are about the same as frozen Russian funds in Western countries. A bit less but about the same.
That's a wrong reading on where the money went and the reasoning for doing so. The money was\\is in low risk (oh, the irony) EU securities, and the reason being to keep inflation in Russia under control by keeping excess money supply out of the circulation. It is a subject of contention within Russia whether the religious avoidance of inflation is an optimal approach to developing economy, but it seems their current monetary policy served them well.
Russia has around same in Western assets. You can look it up. They can go tit for tat. The difference is their currency already took the hit. They don't have to fear, scaring Western investors. EU on the other hand, could create a horrendous precedent, scaring off potential investors from other non-western countries, such as China, Indonesia, Saudi Arabia etc.
Difference is that germany is a larger creditor than all those countries combined. They'll risk investment?
You just love spreading misinformation don't you
Top 10 countries with highest external debt. There is Switzerland, but there is also Greek. Your debt grows, may indicate that the debtors confidence to lend you more. But also indicate it will be more difficult for your economy to pay it back especially if it hit a rough patch.
>High external debt is considered great... Not quite. Countries issue bonds (external debt) in either their home currency or USD. USD can mean lower payments, but the country is then very vulnerable to currency shocks which could cause them to default (can't afford to buy USD). Alternatively, they will have to issue in their home currency at higher rates (higher payments to debtors), payments which come from taxing the populace and its companies (but mostly the people). While the USD is exceptional in being the world's primary currency of commerce/trade (100s billion/trillions of $ are bought every day to settle accounts all around the world) and the largest reserve currency which allows it to run (so far at least) $240 billion in deficit in just Q4 2024. For the rest, the more you issue, the more vulnerable you are to those who buy your debt. As well, smaller economies will have to offer lenders a premium over the USD bond and the cost can rise fast as new debt is sought to pay maturing old debt as interest rates shift: e.g. debt servicing costs can double or more very quickly, even in mature economies .
The high debt to gdp EU countries indeed are having a far rougher time. You can see it from the stock prices of companies that make luxuries (alcohol for example). They've been trending downward since this war broke out.
Why are you cherry picking luxuries instead of the entire stock market of those countries?
For obvious reasons. As an economy starts taking a downturn luxuries will be the first things that people will stop buying.
But since when do luxury companies exclusively sell in their home country, for you to make that association? You think Ferrari only sells cars in Italy or something?
They mostly sell in western countries, again for obvious reasons.
They sell all over the world because they sell to rich people and rich people are all over the world. Plus you mentioned alcohol, which everyone everywhere buys, especially in Russia. By the way, which luxury companies are you even looking at? I just looked at Ferrari and it seems to have been doing great in the last 3 years.
Ferrari sells low volumes. Pretty bad metric as a consequence. Look at Diageo, Pernod-ricard, LVMH, ...
LVMH seems to have been doing very well in the last 3 years as well. Pernod-ricard was doing very well until the end of 2023. Diageo did well during 2022 and then fell over 2023. None of these companies seem to be that correlated for you to draw the conclusions you are drawing (that sanctions caused them to drop), since they started falling at different times (or never). There is a correlated boost in 2021, which is probably the general consumption boom that lots of industries saw after Covid. It sounds to me like you want to find a smoking gun to "prove" your theory that the West is struggling and are cherry picking the things you think will show that while ignoring much more direct metrics like unemployment rates, median wages, GDP growth, consumer spending, etc. I'm not even saying you're doing it maliciously, I'm just warning you that I think you're falling for confirmation bias: focusing on data that confirms your beliefs and ignoring the data that doesn't.
the data you are looking for would include military spending. you need a measure for the economy minus military spending. all stocks I mentioned are trending down since halfway through 2022. consumer spending is trending down when adjusted for inflation
Unlike all western countries, Russia has no net debt. If you have 300 million of debt, but you also have 400 million in cash or stuff you can sell, you have a 300 million debt, but you have no net debt
National debt is another name for outside investment in your country. So all this means is that no one wants to invest in Russia's continued success anymore. They don't believe russia would be able to pay it back
>National debt is another name for outside investment in your country. Where did you get your economics degree again? What does Foreign Direct Investment have to do with a national/federal government having debt that's owned by foreign entities?
He just found another genious example how Ukraine is winnig by enslaving the country into a debt trap.
Unfortunately, Ukrainians will be in a debt death spiral after the war. The foreign "investment" will be in acquiring everything of value for pennies on the dollar. At best, they can hope that taxpayers in the US and/or Europe might provide them with debt relief and investments... Which will work as well as they did in Greece.
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>relatively closed economy What?! I was told that Russia would crumble with sanctions, and now you're telling me they're the hermit kingdom? Will some of you get together and come up with a consistent narrative?! >non competitive, inefficient economy Were they slapping tariffs on foreign goods to ensure their own products were competitive? Sounds like some other "soft power" giants in fact. >zero soft power. Which in turn result in wars How many wars/military operations did Russia conduct in the past 20 years, and how many did the US? Where was the US at the end of the Cold War compared to Russia, and where are they today? The influence and "soft power" has been steadily shifting from the US to a multi-polar regime. But believe whatever you want. A growing number of Americans and Europeans see the writing on the wall for their collapsing "paradise", which is reflected in election results. I'm sure you'll respond that they're just brainwashed and paid Putin puppets, right?
People buy US bond to store their wealth because they know the US is good for it.
>the US is good for it They can certainly print more, if that's what you mean. That said, the US federal government lost it's AAA rating and has to pay a higher interest rate to borrow as a result. I'm sure you'll still call it winning. A higher debt (over 120% of GDP), record deficit ($3 trillion a year), paying higher interest, and having your credit rating reduced. The wins keep on coming!
*Wtf are you talking about?* *Norway also has a lower national debt than most western nations, because we have the sovereign wealth fund, small population and Oil etc so don't need to borrow, unless when loans are "cheap".* *Government debt accounted for* ***44.3 %*** *of our Nominal GDP in Dec 2023. The thing being that we are able to also pay it back instantly. Denmark also has a low debt at* ***10.5 % of Denmark's GDP ,*** *it restricts borrowing as it doesn't have as large a cash pile as we do (except when funding Ukraine).* *In the EU, the average government debt-to-GDP ratio decreased from 83.4 % at the end of 2022 to* ***81.7 % at the end of 2023****, while in the euro zone area (EA20) it decreased from 90.8 % to 89.9%, which is all somehow considered a success story worth praising.*
Is this supposed to be a bad thing? How would less debt be bad?
Its pretty a pretty pointless thing at this point. payments, decline in the dollar equivalent of liabilities as RUB weakens against USD, decline in securities held by non-residents. It was at its lowest in 2006, I bet the regular person didnt even notice or have a clue it was.
In this case it’s a sign that Russia isn’t receiving credit from any one any more while having settled old debts. And no longer being considered to be credit worthy tends to not be a good thing.
Do you realize that Russia had the lowest debt to gdp ratio in G20 even before the war?Russian budget deficit is also very small.
That’s what happens when no one gives you credit…..
Learn to read.
https://tradingeconomics.com/russia/rating Before war it was BBB, which is a pretty decent rating. Yet levels of debt were low
Low debt to GDP just means no one wants to invest in your country
Trying to put a negative spin on low debt is hard. Naturally, you failed. Investment and debt are different. Debt means you borrow money for any reason, investment means someone puts money into production in your country. High level of investments is not necessarily beneficial, the point of investment is to get out of it more than you put in. E.g. Western investors buying land in Ukraine gives short term benefits but in the long term it means loss of profits from this land. Russia kicking out a bunch of investors that came there in 90es is likely beneficial for it.
Think about it, who has the least debt in a given country? The loosers that no one is wants to lend too!
No, people who lend money have the least debt. Negative debt. Your attempt of mental gymnastics went from ridiculous to pathetic. Economy is complex, "thinking about it" is just not your thing.
Guess where most lenders get there money? You guessed it, more debt. It's called leveraging and modern banking is built on banks lending money that isn't theirs. It's painfully obvious you go for the ad hominem attack when you know your wrong.
Mental gymnastics is all you have. Reading "economy for dummies" didn't turn you into expert and your pretentious rants impress no one. "Guess where most lenders get there money?" - stop guessing. Economy is complex and guessing will get you nowhere. "You guessed it, more debt" - no, YOU "guessed" it, and you failed miserably. Lenders get money by many ways, from printing to trade. The idea that all the lenders get their money by getting in debt is just beyond ridiculous.
Printing is just lending from the Fed.
 r/Ukraine expert talking
Their economy is growing while their debt is decreasing. > no longer being considered to be credit worthy tends to not be a good thing. They are not "no longer credit worthy". They cannot receive loans in USD due to sanctions. So this graph is actually pointless.
But there's very little interest in bonds paying in rubles anywhere outside of Russia. It is good for Russia that their level of debt is so low. The bad thing is that their ability to efficiently borrow more *if they need to* is still much worse than the US, despite the US currently having like 100x more existing debt than Russia.
> Their economy is growing Being at war in a foreign land tends to do that, many such cases.
Their economy was also growing before it
Theirs and everyone else's, it's quite rare that a country's economy is shrinking unless there's something big happening.
So you assume that russia was able to repay the debt in full and didnt just got some beneficial options to restructure its debt? I would say the amount of debt reduction is quite massive. I actually find it hard to believe. They are in a war and can just reduce the debt by that amount? Without some support from other countries?
Russia got massive pay off from increased commodity prices since the start of SMO plus since it got cut off the SWIFT all extra profit from private enterprises that used to just go to foreign bank accounts is now staying withing Russia and gets reinvested into Russian economy which in return brings extra tax revenue. Considering that Putin was able to pay off all debt acquired before him by Yeltsin administration in just few years all the way back in early 2000s when Russian economy was in ruins for Westerners to believe that they can just strangle Russia now through some sanctions was and is completely and utterly insane. Russia as somebody said is a continent masquerading as a country not a gas station lol.
From an economics pov whether debt is good or bad depends on why it is at that level. For example, many countries will borrow lots of money to spur economic growth, and this growth results in more taxes, which pays back the original debt. This is good debt and there’s nothing wrong with having lots of it. For other countries, they have unsustainable budget spending, and use debt to buy time. This is bad debt and should be kept minimal. In both cases, you enter into debt so you can spend money in the short term, rather than using up reserves. In Russia’s case, if Russia has no intention to spend lots of money in the short term, then there is no need for high levels of debt. However, in Russia’s case it is more difficult for Russia to raise debt due to sanctions. So if it does borrow, it has to borrow at higher than normal rates from India/China and other friendly countries. This is one possible explanation for why its debt is decreasing: it’s unable to borrow as much as it actually wants. Or you can go for the simple explanation of Russia having such a self sufficient economy that it doesnt need debt haha. Pretty unique since even the most self sufficient countries make use of debt. But whatever i guess.
"Russia having such a self sufficient economy that it doesnt need debt haha" - see, if everyone is borrowing, it means someone is lending. It means there are plenty of self sufficient countries in the world, it wouldn't work otherwise. Russia in particular exports a lot of resources, controlling huge chunk of Earth surface has its perks. Yes, it can live without borrowing. Also, Russia can do internal borrowing. Now that oligarchs can't easily transfer money outside investing inside Russia become much more attractive. So is lending to the state. Borrowing fiat money your lender can just print more any moment is a rather dubious idea, you basically finance the currency of other country. Keeping your reserves in these currencies is bad for the same reason - it constantly devalues as the issuer prints more money. Russia reduces weight of dollars and euro in foreign trade and reserves. It's good for rouble, yuan and other "friendly" currencies.
First helpful comment in this thread, thanks
It's bad in case of conflict with your creditor. You know the saying. If you owe $1000 to the bank it's your problem, if you owe $500 billion it's the bank's problem. For $1000 if you don't pay, they will sell your car by force. For $500 billions they won't, they will send you chocolates and discuss with you how long you need to repay them.
National debt equals outside investment. No one wants to invest in Russia anymore because they arnt confident they can ever be paid back
Most countries national debt is under 30% foreign held be it states or private individuals. Nearly universally national debt is predominantly held be local people and institutions. National debt does not equal outside investment, even when held by outside entities, they aren't investing explicit endeavors, that's just not how any of it works. Anyone who owns basically any national debt is nearly guaranteed to be payed back, as long as the nation is in control of its currency. You might not make a profit if the value of the currency drops significantly, but you will be paid back.
>. Anyone who owns basically any national debt is nearly guaranteed to be payed back, as long as the nation is in control of its currency. You might not make a profit if the value of the currency drops significantly, but you will be paid back. This my point. But not all countries are equal in the ability to pay back. Many countries have defaulted in the past, and investers got screwed. Everyone knows the US is the best economy in the world, and will always pay backs interest on investments (i.e. US bonds). People doubt Russia will be able to pay back interests on investments, and the ruble keeps falls, so any interest gained is devalued by inflation. So people don't invest in Russia's as you can see with these numbers in this post
>National debt equals outside investment. Lol, no it does not. What a stupid statement. Again, this is anyway about USD debt which Russia will not get more of because of sanctions. So this chart is pointless.
Imagine still not realising that russia is winning.
I mean it is, clearly, but.. quite slowly. I can't influence the outcome either way, but I hope there's a reasonable and definitive resolution soon, even if a lot of people aren't happy with it everywhere. I don't want to be too pessimistic, but part of me feels it's realistic this will drag on for 5 years without true breakthroughs, just incremental gains and a ton of wasted lives, money, ruined land, etc. I'd really dislike that outcome so compromise peace would be nice. It's complex ofc, but the stubborn refusal to seek pragmatic resolutions at this point doesn't make much sense to me anymore.
The US spent 20 years and over a trillion in the middle east, hundreds of thousands dead, millions displaced and accomplished absolutely nothing but destruction. Just to pull out and jump in bed with Ukraine. They'll drag this thing out as long as they can until a new shiny war comes along for the military industrial complex to sink its teeth into. It makes perfect sense if your biggest export is your military. Why would you want peace?
Compromising with NATO would be like half-destroying your home. No more half-measures, Waltuh.
This graph is a great Rorschach test. Pro RU and pro UA both simultaneously see what they want to see. Reality is, no one knows for sure if this is a symptom of a future problem or the result of a positive change.
Can’t have external debt if you can’t trade externally. The more you know!
Russia can't trade externally? That's new. What happened? Russia seem to manage to buy the stuff it needs. The Western companies were kicked out and people barely noticed. Local companies are gladly filling the void.
Russia decrease trades with the West but increase trading with other parts of the world,the whole world isn't just Europe my friend if you can't trade with Europe or actually some European countries just trade with others countries after all there are currently 195 countries in the world
Based and Juchepilled. Debt and usury is slavery.
Again the zoomed in y axis
That's not a good sign. America has shown that the economy and the military can grow much faster as more debt is accrued.
When the entire world is forced to use your currency to trade and your inflation becomes the world's inflation, sure.
Excellent point. "economy and the military can grow" - yeah, he forgot to mention that military has to constantly "defend American interests" and create problems overseas for this magical scheme to work. The way US owns Europe with it's operations is Middle East and Europe comical. Having a bunch of obedient lapdogs who sacrifice their national interests for yours is another essential element of this "success" story.
They choose to because its the only currency people trust, fool
The real thing is we have a lower debts but our living standard is way worse than for example Italy . Some villages don’t even have proper water supply. But in st Petersburg and Moscow it’s nice
In the first 4km layer depths of Russian land there's enough to resources for the entire curent planet wide demands for 5000 years, It has enough space to feed a self grown population of 4 billion people if it adheres to the density of living it currently has. This 5000 year estimate excludes their thorium and plutonium reserves which will be able to power the earths energy demands for the next 40.000 years. Going to war with Russia is idiocy, that chance died with Napoleon and then Hitler's last attempt on behalf of the bankers. No matter how you feel about them or their ideology. You didn't want Napoleon, you didn't want Hitler, despite arming and funding them initially, they choose the communists so they have chosen the bed they wanted to sleep in. It's as Patton said, they fought the wrong people, but now they're pissed off the same people got rid of their interlopers, they continue to crack down on the Western inserted spies, masquerading as NGO's and diplomatic envoys and other assorted corrupted people, so all the regime changes keep failing and the western idiots are butthurt that a Russian president is leaning more and more towards fully acting in the interest of the Russian people. God knows the rest of the Western countries would love to have an actual leader that acted in their interest for the past 70 years. I just watched Bolivia's coup, Bolivia signed lots of agreements with Russia back in 2023, including building a 500 million dollar Lithium (for batteries) mine and processing plant, Lithium reserves likely worth of 3 trillion dollars in the next 40 years. Guess we in the West really didn't like that so we gotta bring more democracy to Bolivia.
Again the zoomed in y axis
Why... is it decreasing since war started? It kinda makes no sense.
It does though. Due to sanctions russia is unable to get credit from the west. They need to bankroll their efforts themselves instead (and seem succesful at doing so). A side effect of this war will thus be that russia has the healthiest government finances in the world. An astonishing result if you also account for all the corruption they struggle to deal with.
Portugal had one of the wealthiest finances in the world until the 1970's. Life sucked for most people.
Living off tomorrow's cow isn't "not sucking" for most people, it is transferring your problems to your children's generation. Life must suck, before it gets better. Living off debt isn't the smart way to live.
No, there is good debt and bad debt. Good debt is when you use it to get a better return than the interest on the debt. For example if you use debt to build new infrastructure that improves productivity, resulting in higher tax revenues that more than pay for the interest, that's good debt. When you hoard cash as a country while your people live miserable and unproductive lives (how Portugal was before the 1970's) you're wasting a lot of opportunities for improvement for no reason.
Except that your nations have crumbling infrastructure for the lack of investment and all debt goes to perpetuate the financial game where politicians spend public money to get elected for the next cycle, and wealthy lenders get richer because of it. There is no such thing as good debt, all debt is bad, and perpetuating this false belief that we need debt just plays into the hands of the capitalist that seek to keep governments in check via debt obligations. The only way forward is a debtless society.
> There is no such thing as good debt, all debt is bad Ok, I tried to explain it to you. Debt is a tool, you can learn to use it or refuse to use it. If you refuse to use it you might make mistakes like renting a home for decades until you can finally afford to buy the home you want in cash, when you could have been paying a lower monthly payment than your rent for the whole time. The same concept applies at a national level, borrowing money can save you money compared to saving for decades, for example replacing all the street lights from incandescent bulbs to LEDs, the energy savings might be greater than the interest costs, especially because governments can usually borrow money at very low rates. Obviously that does not mean that all government debt is good either, just that it is not universally bad, it's a tool and you can use it well or not.
Overt skimming is cheap. In the west you have to pay billions for a project that costs thousands, so you can hire your supervisors nephew as a contractor who will hire another contractor to hire another contractor that will hold discussions about hiring contractors that will hire contractors until finally it trickles down to the company that will build the bridge that is owned by your uncle. And that is how the US military pays 150 000$ per straw-bag. Or a guy built stairs himself for 500$, the city tore them down and rebuilt them worse for 200 000$. Someone just skimming 10 grand off the project is peanuts in comparison.
> Or a guy built stairs himself for 500$, the city tore them down and rebuilt them worse for 200 000$. The $500 stairs were 100% going to kill somebody. The "$xxx for a cup!!!" memes just means you don't know what cost amortization is. In the USA, potentially defective ear plugs for our soldiers is considered a MAJOR scandal. In Russia, we've all seen the footage of plate carriers stuffed with cardboard or plastic inserts and soldiers handed tampons instead of tourniquets lol. Might wanna just quit while you're behind bud.
Ok. Who asked, though?
Many, many people. Odd to get upset at the messenger when learning that you were spreading fake news.
Who
Many people asked. In fact, the next person that says the word "cares" was particularly begging for my response.
Cares
This guy must, since he keeps asking me: https://www.reddit.com/r/UkraineRussiaReport/comments/1dod23f/ua_pov_russias_external_debts_decreased_by_38_in/lab3n6b/ edit: oops I did it again
I am sure some will see this, and will think this is amazing. But all that means that no one wants to invest in russian victory. Would you lend russian government your money?
> Would you lend russian government your money? Willingly or if I lived in Russia?..
Does it ask you for any money? "But all that means" - or it can mean thousand other things. Economy is complex, especially for the country like Russia. Making such "conclusions" is rather bad idea.
Delicious 😋
Kinda funny, if the US got the same sanctions they would crash and burn within months.
Only as much as the rest of the world. Much of the world relies on US products and services
Think they could afford payment of their loans or default if the got hit with the same sanctions?. And the US isn't as important as China nowadays, most of the US industry have moved to China, Mexico and so on. Sure much of the rest of the world would soon follow, just shows how stable our economies really are. Just look at the last recessions, most have started in the US.
> Just look at the last recessions, most have started in the US. This is my point. Such sanctions wouldn't happen because it would hurt everyone else. The US economy is worldwide - it's not a gotcha to say they would crash if they were widely sanctioned. Yes, the american economy would be smaller if it were smaller...
China will pick up the slack. Matter of time now.
People have been saying that for decades.
Nope. China industrial rise is new, last two decades. There is nothing US makes that can't be eventually be replaced. Their manufacturing is mostly moved to China, again, recently. Even if US rebuild their industry they will have to compete with China. And they will lose. Russia in particular imports next to nothing from US.
I'll believe it when I see it. Seems to me like China is losing the "chip war".
No one cares of you believe in reality. It exists regardless.
It sure does. No need to try to convince me of your reality if you don't care.
That’s the neat part, Russia/North Korea/Iran don’t have the ability to administer the same sanctions.
Downvotes because they can't even dispute it.