As oil falls, Russia choked by military, social spending

[1step]

Source: Reuters

By Darya Korsunskaya and Elena Fabrichnaya

MOSCOW Tue Dec 30, 2014 3:01am EST

(Reuters) - Russian authorities are facing some unpalatable options as they try to keep the economy afloat - unless they can persuade President Vladimir Putin to curb massive military spending.

Officials fear that without limiting the defense budget, the government will have to raise taxes, increase the pension age or print money to prevent the state deficit from running out of control.

Despite a crisis brought on by diving oil markets and Western sanctions, they believe Russia can muddle through next year provided the price of crude, its dominant export earner, holds near current levels.

But even at $60 per barrel, the present oil price is little more than half what the Kremlin needs to balance the budget, and it is quickly running out of money.


Read more: http://www.reuters.com/article/2014/12/30/us-russia-crisis-budget-idUSKBN0K80EK20141230

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Oh, but the sanctions didn't hurt at ALL! Right, Vlad? Vlad?

[belzabubba333]

1. it's what happens when you dont diversify-

[jakeXT]

3. Obama: "They rely on oil. We rely on oil and iPads and movies and you name it."

"The big advantage we have with Russia is we've got a dynamic, vital economy, and they don't," he said. "They rely on oil. We rely on oil and iPads and movies and you name it."

http://www.bbc.com/news/world-us-canada-30629200

[belzabubba333]

4. that's why the irish had their potato troubles they only grew the one crop when disease swept in

it killed all their potatoes and my family was run out of county cork

[1step]

5. Well, the British "helped"

Bastards!

[Sherman A1]

6. Precisely

There was plenty of good in Ireland until it was taken to England.

[librechik]

2. legalize pot and hemp.

problem solved

[DetlefK]

7. No way the Vodka-lobby would allow that.

What do you think, who's fighting marijuana-legalization in the US?
The beer-producers!

[IthinkThereforeIAM]

16. Yep...

... every time marijuana legalization comes up in state and national legislatures, the beer/alcohol lobbyists go into full swing to fight it. Marijuana is a big competitor for beer/alcohol industries. If a person has some weed, they are less likely to go hit the bars and pick up a 12 or 15 pack at the 7-11. And are healthier for it.

I have said this for over a decade.

[jwirr]

8. Choked by military spending. Wouldn't you think they would have learned? Overstretch pulled the

USSR down also.

And yes once you are overstretched with military spending then social spending adds to the problem. All too often (like the USA) the country in trouble starts cutting the social spending at home in order to maintain the military spending and thus causes it's own trouble there.

Stop your damned aggression against your neighbors and get back to working with your own people.

[uhnope]

9. +1

[Duckhunter935]

15. +2

[Tarheel_Dem]

25. +3

[onwardsand upwards]

32. But what do you know about the "revolution" in the Ukraine that displaced ...

... the democratically elected president Viktor Yanukovich?

Was it a legitimate revolution, or a CIA-inspired "regime change"?

Do you really think it would be reasonable for Russia to allow their base in Sevastopol to be in a country with a western puppet regime? What course of action would have been reasonable?

[jwirr]

36. I have been watching what is going on. They have a choice. Go down again because of overstretch

or continue to use all their money for military. Putin might like to try diplomacy.

[Posteritatis]

40. Not seizing territory from a sovereign country by force?

It isn't bloody complicated.

If the United States did that to Canada or Mexico most of the cheerleaders here would be in the streets with pitchforks, but since it fits the neat little Manichaean geopolitical worldview, and works so well with the "foreigners don't have agency anyway" meme, so many around here have it's okay.

[onwardsand upwards]

43. The US doesn't need to seize Canada or Mexico ...

... it already controls them completely!

A better analogy would be: suppose Russia engineered a coup in Canada, and installed a Putin-friendly puppet as Canada's new leader. Would the US sit by and watch all those bases in Canada come under Russian control?

Might the US, in that case, "seize" Canada?

[Posteritatis]

44. *facepalm* (nt)

[florida08]

10. The oil coup

http://www.counterpunch.org/2014/12/16/the-oil-coup/

[joshcryer]

23. The word "coup" has almost lost all meaning.

The way people throw it around.

Hell, even if it was a coup, Putin has never won an election, so you can't overthrow an unelected person.

[freshwest]

33. That piece was full of hyperbole. ISIS gets hurt by oil prices, likely. Fossil fuels suck, anyway.

The Saudis are financing their own green revolution with the sale of their dirty oil, and most of the world will do the same. If that's part of the hysteria about the world order the article is so eager to sell us, it must be bad for the Koch Industries.

Regarding Putin, don't forget he's 'very' popular... or so we hear and 'elections don't matter,' or at least some claim.

Okay, I'll quit, shouldn't post in the middle of the night anway.

Happy New Year, Josh.

[Igel]

11. The Western sanctions are hurting much less than OPEC.

The sanctions have a knock-on effect, even though they were first.

A greater effect has been increased oil production in the US and Canada coupled with Western conservation efforts and renewable energy. A little drop in petroleum demand produces a big decrease in prices.

If the West sticks with them the sanctions will hurt more because Russia last time turned to Western capital markets. The only problem would be if China uses all the surplus trade dollars to bail out Russia. Then we have a Chinese master for a Russian lapdog. The two are fairly similar in many ways.

[Sunlei]

12. The sanctions hurt the russian 1%ers. could always double the price on military gear putin sells to

'Leaders' like Assad. Or cut the price of Russia domestic gasoline in half to help his own people.

[nichomachus]

13. So, the neoliberal plan to destroy Russia is working

Obama, Victoria Nuland, and the other corporatists must be giddy with joy. Now they can be masters of the world.

[Adrahil]

21. Yes... Poor little Russia...

They just want to be left alone to goggle former imperial possessions in peace!

[Tarheel_Dem]

26. ???!!!???

[nilesobek]

35. Its not going to work.

Russia is not Iraq or some banana republic. Nuland and crew will be lucky to get out of Ukraine alive. Many of the mercs have already been targeted and assassinated by Eastern rebels.

[vkkv]

14. A ha ha ha !!!

Finally some GOOD NEWS in the international arena.

[DeSwiss]

17. Propaganda

The West is trying to make their stupid sanction moves seem effective. It's hurting Europe more than Russia. Ask their farmers. Ask the French shipbuilders. Sanctions are an act of war but no one in this stupid country objects. When everyone knows its the The West whose been living off their credit cards for decades. We're the ones about to fall.

They wanted Russia to sell their gold.

They're not selling.

They and China are still buying gold in anticipation of the GREAT COLLAPSE!

- It's really kind of funny how people here think that a couple of weeks of low oil prices is going to bring Russia to it's knees. When in truth, it is the West lives on its knees but don't know it because its the only view most have ever seen......

[newfie11]

24. Agree and thanks for posting this. Nt

[Tarheel_Dem]

27. Yup. Exactly what we need, more straight talk from non-government controlled outlets like "RT".

Oh wait......

[newfie11]

30. Lets see how about our pillar of information

Foxxxxxxx news
For that matter all of our media is owned by 6-7 oligarchs.

Truthfully I get more world news from media in other countries.

[Tarheel_Dem]

37. Who here defends Fox News? Try again.

[newfie11]

38. Did you read past Fox News? Nt

[Tarheel_Dem]

39. Did you read past "non-government controlled"?

[joshcryer]

28. Owning homes is good, but it could affect upward mobility.

The reason being that mortgages in Russia are very high interest, so Russians can't move from their homes, and they have little resell value, again because of those high interest rates. So buying and selling homes is a very real issue there.

The United States isn't going anywhere.



Until people recognize US economic dominance in the world, they will bury their heads in the sand.

[nilesobek]

34. They've thrown open the old gold mines

in Siberia and elsewhere that were closed during ww2. They intend to stockpile enormous reserves of gold. The drop in gold prices was felt mainly in India, London and Washington. No one knows how much reserves they have. If they pick the right time to do a gold dump it could severly damage many economies. How long can the Saudis keep up the low oil prices? Until the next terrorist attack? IMO the longer this drags out the more it favors Russia.

[Baclava]

18. He who controls the spice, controls the universe!

So I bet Russia KGB knows wars stimulate it's economy now, too. I hear the tank wheels grinding.

I hope the Saudis are ready for an attack on their oilfields by Russia through Iran, 'Let the Global Oil Wars begin!'

Would we risk global thermonuclear war over the Saud's oilfields? Are they really our friends?


they should make a movie

[1step]

19. With Exxon-Mobil as CHOAM

Yep, I'm a nerd!

[Baclava]

20. Well done! 'Many Houses depend on CHOAM profits'

'The CHOAM essentially controls all economic affairs across the cosmos'

[1step]

22. It's enough to make ya fall off the wagon

And I've been semuta-free for nine years now!

[Babel_17]

31. Control the coinage and the courts -

let the rabble have the rest.

I was told I could get my nerd card stamped here.

P.S. "Remedy this situation! Restore the Spice production...or you will live out your life in a pain amplifier!"

[quadrature]

29. pumping oil... easy to tax ...

same for other mining activity.

trying to tax other activity,
the people tend to fight back

[pampango]

42. Russia's military spending is 10 times what it was before Putin came to power.

Russia is spending more on its military than ever: Putin has led Russia through its biggest military expansion since the fall of the USSR. In 1999, Russia spent around 165 billion rubles ($2.7 billion) per year on its military. That doubled by 2001, and by 2009, it was 10 times that amount. Russia became the third-largest military spender in the world this year, surpassing the United Kingdom and sitting behind China and the United States. Russia looks to continue that expansion through 2016. The government plans to spend 3.03 trillion rubles on its military next year, including updating equipment and spending on its nuclear capabilities, according to Sputnik News. The Russian Security Council called NATO Russia's biggest external threat earlier in December and it plans to do more to assert Russia's sphere of influence around its borders, particularly to the West.

The ruble is worth less than its ever been: The ruble was worth about 27 to 1 U.S. dollar when Vladimir Putin was handed the presidency by Boris Yeltsin. Just before he took office, the ruble was extremely volatile, but Putin managed to stabilize it and gradually grow its value against the dollar all the way up until the 2008 global economic crisis. Just before the crisis hit in late 2008, the ruble was worth just under 24 to 1 USD. The ruble hit an all-time high, meaning it’s worth the least its ever been, this month when it was measured at 79 to 1 USD. Russia is in its worst economic crisis since 2008, mostly due to free-falling oil prices but also because of Western sanctions over its alleged involvement in Ukraine.

Russia is now 10,000 square miles bigger than it was in 1999: Although a number of Western countries will dispute that it was legitimate, Russia grew by 10,000 square miles when it annexed the Ukrainian peninsula of Crimea in mid-March. Russian military forces also now occupy South Ossetia and Abkhazia, two breakaway Georgian states that together make up just under 5,000 square miles.

Civil liberties and freedom of expression are weaker than ever: The government has gone after political dissidents -- most recently punishing the younger brother of anti-Putin crusader Alexei Navalny on Monday with imprisonment for three and a half years -- taken over a number of private businesses and expanded its state-owned media. While Russia never had a fully free press, it’s now ranked in the lower percentile in Reporters Without Borders’ Press Freedom Index. Putin championed anti-gay legislation that went into effect July 2013 banning “propaganda of non-traditional sexual relationships” and has vehemently upheld that law with strong crackdowns on the activities of LGBT rights advocates.

http://www.ibtimes.com/vladimir-putins-15-years-power-5-ways-russia-has-changed-1771020