Comments on: Russia Wrestles With Ruble Collapse http://ContrarianEdge.com/2008/12/17/russia-wrestles-with-ruble-collapse/ Vitaliy Katsenelson blog on the economy, stock market, and stocks. Applying Active Value Investing approach. Fri, 18 May 2012 08:51:00 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: chelman http://ContrarianEdge.com/2008/12/17/russia-wrestles-with-ruble-collapse/comment-page-1/#comment-183244 chelman Sun, 04 Jan 2009 21:05:01 +0000 http://ContrarianEdge.com/2008/12/17/russia-wrestles-with-ruble-collapse/#comment-183244 Actually Russian growth was highest when oil traded at 15$ per barrel in 2000. High commidity prices actually curtailed growth slightly as this led to a rapid appreciation of the ruble and caused problems for domestic manufatcuring. This is known as the "Dutch Disease" by economists. Sloppy and outright false reporting. Learn the facts befor you regurgitate: Russian GDP http://www.balticdata.info/russia/macro_economics/russia_macro_economics_russia_GNP_GDP_summary.htm price of oil: http://www.inflationdata.com/inflation/Inflation_Rate/Historical_Oil_Prices_Table.asp In fact Oil just broke the 50$ mark in 2005 and traded at 64 in 2007. Expect a rapid return to GDP growth in Russia with the very beneficial devaluation of the ruble -excluding world financial armageddon - which is very possible. In this case Russia will be o.k. too(in a relative sense, compared to other countries) as they are the only self sufficient country in the world(Oil, gas, grain, uranium etc..) Actually Russian growth was highest when oil traded at 15$ per barrel in 2000. High commidity prices actually curtailed growth slightly as this led to a rapid appreciation of the ruble and caused problems for domestic manufatcuring. This is known as the “Dutch Disease” by economists. Sloppy and outright false reporting. Learn the facts befor you regurgitate:

Russian GDP
http://www.balticdata.info/russia/macro_economics/russia_macro_economics_russia_GNP_GDP_summary.htm

price of oil: http://www.inflationdata.com/inflation/Inflation_Rate/Historical_Oil_Prices_Table.asp

In fact Oil just broke the 50$ mark in 2005 and traded at 64 in 2007. Expect a rapid return to GDP growth in Russia with the very beneficial devaluation of the ruble -excluding world financial armageddon – which is very possible. In this case Russia will be o.k. too(in a relative sense, compared to other countries) as they are the only self sufficient country in the world(Oil, gas, grain, uranium etc..)

]]> By: MH http://ContrarianEdge.com/2008/12/17/russia-wrestles-with-ruble-collapse/comment-page-1/#comment-181685 MH Tue, 30 Dec 2008 22:45:23 +0000 http://ContrarianEdge.com/2008/12/17/russia-wrestles-with-ruble-collapse/#comment-181685 It is amazing to see how quickly everyone dismisses the high oil prices we have been experiencing the past few years as a speculative bubble akin to the dot com era and that now oil prices have fallen back to their rightfull levels below $40. Would suggest you get yourself a copy of the IEA World Energy Outlook 2008 report. Higher oil prices will be the norm not the exception in the future and we all better get used to that. The theory of Peak Oil is fundamentally very true. The ability to increase supply will not match the growth in the global demand for it and that results in shortages of something the entire globe is addicted to. Ever seen the movie Mad Max? Russia controls the some of the largest reserves of oil and natural gas (outside of your pal Iran & SA) in the world. More importantly though they control its distribution to Europe and the rest of the world. And like it or not, you and me and everyone else out there needs it. Mark my words, Russia intends for us to pay very heavily for it. The military move into Georgia had nothing to do about protecting the Russian people. It was all about securing the transit lines for Caspian oil. The Russians now control it and believe me they will use this leverage when the time is right. You are predicting the collapse of the Ruble....I will predict the collapse of the USD beforehand. Your country is bankrupt. You have no savings. You have no oil. You have no gold. Right now the outcome for the USD is all about confidence. Short term people see it as a safe haven. Once the printing presses are unleashed at full speed by "Helicopter Ben", this confidence will wain and the USD will fall, never to be seen again. Read some financial history my friend. The similarities between the US and Germany in the 1920's is utterly striking! As you phoned your friends in Russia, I phone my friends in the US and tell them to get out of USD....and into gold....and then get your gold out of the US. Here is a link to the IEA site FYI: http://www.worldenergyoutlook.org/ All the best for the New Year It is amazing to see how quickly everyone dismisses the high oil prices we have been experiencing the past few years as a speculative bubble akin to the dot com era and that now oil prices have fallen back to their rightfull levels below $40. Would suggest you get yourself a copy of the IEA World Energy Outlook 2008 report. Higher oil prices will be the norm not the exception in the future and we all better get used to that. The theory of Peak Oil is fundamentally very true. The ability to increase supply will not match the growth in the global demand for it and that results in shortages of something the entire globe is addicted to. Ever seen the movie Mad Max?

Russia controls the some of the largest reserves of oil and natural gas (outside of your pal Iran & SA) in the world. More importantly though they control its distribution to Europe and the rest of the world. And like it or not, you and me and everyone else out there needs it. Mark my words, Russia intends for us to pay very heavily for it. The military move into Georgia had nothing to do about protecting the Russian people. It was all about securing the transit lines for Caspian oil. The Russians now control it and believe me they will use this leverage when the time is right.
You are predicting the collapse of the Ruble….I will predict the collapse of the USD beforehand. Your country is bankrupt. You have no savings. You have no oil. You have no gold.

Right now the outcome for the USD is all about confidence. Short term people see it as a safe haven. Once the printing presses are unleashed at full speed by “Helicopter Ben”, this confidence will wain and the USD will fall, never to be seen again. Read some financial history my friend. The similarities between the US and Germany in the 1920′s is utterly striking! As you phoned your friends in Russia, I phone my friends in the US and tell them to get out of USD….and into gold….and then get your gold out of the US.

Here is a link to the IEA site FYI: http://www.worldenergyoutlook.org/

All the best for the New Year

]]> By: Bill Northlich http://ContrarianEdge.com/2008/12/17/russia-wrestles-with-ruble-collapse/comment-page-1/#comment-177994 Bill Northlich Thu, 18 Dec 2008 17:57:09 +0000 http://ContrarianEdge.com/2008/12/17/russia-wrestles-with-ruble-collapse/#comment-177994 I too have an issue with "The time horizon and time in office of a government bureaucrat is much shorter than the horizon of an oil company," I think the Wall Street scandals have shown the opposite. The time horizon of a person in business is up to the next bonus or raise or promotion. Fast-trackers in business frequently spend less than a year in a position, put some stuff in place, and move on, leaving trails of disorganization and confusion. This can be sublimely masked by a fast-growing business, but in flat or down times, the roaches come out of the cupboard and things go south quickly. In decline, business leaders if lucky have moved on to the next musical chair, or, if unlucky, are mush. Read Reich's "Supercapitalism". The original myth that business builds for the long term with the good of it's employees, community, or even it's own long term interests in mind is revealed therein to be today a much bigger myth than it originally was. Most business leaders are just hoping they can survive until they get to an exit strategy - before anyone finds out what the real state of affairs is. Accounting provides a Taleb-like trail of data which people believe until they don't. At least a govt. bureaucrat might be in a job "to serve the public interest", and, for more than a year or so. I too have an issue with “The time horizon and time in office of a government bureaucrat is much shorter than the horizon of an oil company,”

I think the Wall Street scandals have shown the opposite.

The time horizon of a person in business is up to the next bonus or raise or promotion. Fast-trackers in business frequently spend less than a year in a position, put some stuff in place, and move on, leaving trails of disorganization and confusion. This can be sublimely masked by a fast-growing business, but in flat or down times, the roaches come out of the cupboard and things go south quickly. In decline, business leaders if lucky have moved on to the next musical chair, or, if unlucky, are mush.

Read Reich’s “Supercapitalism”. The original myth that business builds for the long term with the good of it’s employees, community, or even it’s own long term interests in mind is revealed therein to be today a much bigger myth than it originally was. Most business leaders are just hoping they can survive until they get to an exit strategy – before anyone finds out what the real state of affairs is. Accounting provides a Taleb-like trail of data which people believe until they don’t.

At least a govt. bureaucrat might be in a job “to serve the public interest”, and, for more than a year or so.

]]> By: JP http://ContrarianEdge.com/2008/12/17/russia-wrestles-with-ruble-collapse/comment-page-1/#comment-177815 JP Wed, 17 Dec 2008 22:08:27 +0000 http://ContrarianEdge.com/2008/12/17/russia-wrestles-with-ruble-collapse/#comment-177815 "Communism failed for a reason: Government is a horrible capital allocator." Do you think we could get that statement put on a bunch of large signs and put them up around Washington? “Communism failed for a reason: Government is a horrible capital allocator.”

Do you think we could get that statement put on a bunch of large signs and put them up around Washington?

]]> By: David Hodge http://ContrarianEdge.com/2008/12/17/russia-wrestles-with-ruble-collapse/comment-page-1/#comment-177795 David Hodge Wed, 17 Dec 2008 19:38:31 +0000 http://ContrarianEdge.com/2008/12/17/russia-wrestles-with-ruble-collapse/#comment-177795 A bold prediction, Mr. Katsenelson. If you are correct, this proves that the Russians do not yet understand the prerequisites of a successful capitalist economy. I did not believe that the erstwhile strength of the Russian markets was a signal of fundamental improvement in their economic system, because of their poor treatment of foreign investors. The recent action in Georgia was yet another reason for me to continue in my USSR-era boyhood belief that the Russians simply cannot be trusted (yourself as a notable exception, of course). A bold prediction, Mr. Katsenelson. If you are correct, this proves that the Russians do not yet understand the prerequisites of a successful capitalist economy. I did not believe that the erstwhile strength of the Russian markets was a signal of fundamental improvement in their economic system, because of their poor treatment of foreign investors. The recent action in Georgia was yet another reason for me to continue in my USSR-era boyhood belief that the Russians simply cannot be trusted (yourself as a notable exception, of course).

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