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Mark Kraft

As economist Milov mentions, >60% of Russia's cash reserves - the vaunted sovereign wealth fund - are to be released in December to finance the deficit.

But he was using the official figure of 2.12T Rubles, not the updated figure of 3.296 T.

Basically he's saying that Russia will need to drain over 92% of their reserves to finance this year's debt... which, btw, traditionally rises in Q4, likely draining the entirety of Russia's cash reserves... plus more, largely due to poor bond sales.

@KraftTea
they'll print more money. we'll see the effect on the "exchange" rate.

"exchange" because the volumes are so low, it is difficult to consider it an "exchange"

@KraftTea not knowing anything about economics, does it really matter if your money come from savings or you just print them? Maybe it matters for foreign investors, but does it matter internally? Let's say you had near infinite savings, you'd create inflation just the same?

@morten_skaaning @KraftTea All FIAT currencies are about trust. Trust that my lifetime savings won't dissappear. Printing the money and devaluating currency means people's savings are going to hell. When you lose trust in your countrie's currency, you will try to save in foreign one, that holds value. Which is hardly possible in dictatorships. At one point they will make a "money reform" and people will lose all their savings. Happened in my country during "socialist government".

@morten_skaaning not infinite, they can print as much as they want but without real values to guarantee it, it slowly turns "money" into just the paper its printed on
Think about Germany printing like crazy and assuming debts to finance WW1, which they lost and so got no pillaged riches + damages to the other side, and its consequential 1920s hyperinflation where money was worthless
Russia has mastered the art of "creative bookkeeping" but at the end they cant reinvent math

@morten_skaaning @KraftTea They can actually have "infinite money" if they have infinite paper. But what will be the value of that money is another thing. Believe me that even in dictatorships it doesn't work. Just look at the North Korea. They can print whatever they like. What is the living standard there. Poverty!

@WashingtonIrving @KraftTea so the Russians will loose the means to buy foreign goods, except through bartering, or reserves of gold or oil. I wonder how willing a population near starvation will be to die for their dictator. If Putin looses face even more, would that break the camels back? There can't be glory without glory?

@morten_skaaning @WashingtonIrving In many cases, they already have. China doesn't want to take rubles, in most cases. And why should they, when they can basically demand payment in gold, in many cases... oftentimes at a premium.

That's right... they are using sanction-evading ways to trade Russian gold, for less than the price of gold. Which is basically the same thing as free money, IF you can find a legitimate buyer.

Of course, this tends to deflate the actual value of gold.

@morten_skaaning @WashingtonIrving I don't think Russians will starve yet, but a combination of climate change, wage inflation & overtaxation is destroying Russian agricultural production & profitability, which just got hammered with some of the worst harvests in recent history.

Russia is not very good at being productive at ANYTHING. Agriculture should be their strong point, but they are facing a LOT of headwinds. Marginal soil during climate change is a death spiral, without major investment.

@morten_skaaning @WashingtonIrving That's a bit like saying you can indefinitely slice a steak.

What matters when it comes to the value of money is the production of the economy. With the exception of military production, Russia's economy is shrinking. So while the Russian people might be earning more rubles, the value of those rubles is less... which is why their key rate & inflation level is so high, and they are trying to convince the world otherwise through duplicitous means.