Do you deplore fake economy these days?

[Sliver]

I was the one who said Assad cannot be beaten. Because Assad is Russia's puppet. I say economic sanctions have no effect on Russia. You may believe or not believe. Time will prove I am right. Because money economy is fake. Only production economy is real.

what exactly in money economy and what is a production economy?

 

[Bas_kya_bhai]

america produce nothing, i guess. khali weapon, planes ,electrical equipment ,transportation equipment ,timber , food, oil, automobiles, etc se kuchh nahin hota. bhej bhej ke kitne satellite dunya ke liye bheje honge? nasa to loss karti hogi. na na money economy se kuchh nahin hota.

 

[xyxmt]

Dream on kid.

Russia used to be able to trade oil for American labor at the rate of 1 barrel per 2 hrs of skilled labor, or 10hrs of unskilled labor. Now Russia can get only 2/3rds of that, or so. That is a real decline.

Looked at another way, I as an an American, have to trade 1 hr of labor for about 13 gal of gasoline. I used to have to trade about 1 hr for only 9 gallons. That is a real difference, no silver or gold required for it to be real. Likewise, Russians used to be able to trade their labor for more western goods, but the falling price of oil and sanctions mean that they now are trading more labor for less goods/services. That is very real, no gold or silver required.

Forget about hard currency, and look at what people actually do (work) and what they get in exchange (goods/services). How they accomplish that is by trading work for currency ($ or rubles, or whatever) and trading the currency for goods/services. If you "add a zero" it immediately causes the vendors of goods and services to add a zero to their prices. Getting your boss to give you a wage increase takes longer - so wager earners wind up being losers. People who are in debt also "win", people who are owed money lose. Since rich people are generally "people who are owed money" they tend to not like that kind of adjustment. The people running Russia are both RICH and OWED LOTS OF MONEY, so Russia is not going to do that.

I tend to believe that you are partially right - sanctions will have a minimal effect on Russia. However, the falling price of oil is killing them. And your views on economics are just completely wrong.

you seem to be a smart guy, i need to understand why Sanctions on Iran caused oil price to go up while Sanctions on Russia which produces more oil than Iran the effect on oil prices are reversed. I know Saudis are pumping more oil but they can pump all the oil they cannot makeup for the russian oil.

 

[Superboy]

what exactly in money economy and what is a production economy?

Money economy is currency amounts set by the government. Production economy is actual production rate. For instance, Saudi Arabia cuts price of oil because he felt like doing it to attack Shia Iran. That is money economy and fake because it's based on a feeling and doesn't change production rate.

Oil Tumbles on Saudi Price Cut as European Bonds Rise - Bloomberg

 

[Sliver]

Money economy is currency amounts set by the government. Production economy is actual production rate. For instance, Saudi Arabia cuts price of oil because he felt like doing it to attack Shia Iran. That is money economy and fake because it's based on a feeling and doesn't change production rate.

Oil Tumbles on Saudi Price Cut as European Bonds Rise - Bloomberg

what is your age?

 

[Sliver]

Money economy is currency amounts set by the government. Production economy is actual production rate. For instance, Saudi Arabia cuts price of oil because he felt like doing it to attack Shia Iran. That is money economy and fake because it's based on a feeling and doesn't change production rate.

Oil Tumbles on Saudi Price Cut as European Bonds Rise - Bloomberg

You said "Price" of oil. Exactly how do you describe the "price"?
some economy is based on feeling, and that feeling is based on forecasting, risk and risk tolerance of the people investing.

the futures market is based on confidence levels of the "future". Which may be, in varying amounts, influenced by an investors "feeling".

"money" is a measure of a persons productivity. It is a representation of worth of an effort. Saudi Arabia had petroleum reserves for centuries before the industrial revolution. Its "worth" only increased later. A calculation standard for this "worth" is money.

what you call "paper money" is worth only when it is insured by the worth of a man's effort. a 100$ paper money is worth 100$ if I can the effort of a 100$. the 17 trillion US economy is worth that much not because there is that much paper money to be printed, but because the combined effort - physical, mental, creative, scientific, technological efforts - are worth that much.

 

[Bas_kya_bhai]

i bet he has still smthin to say

 

[nvKyleBrown]

you seem to be a smart guy, i need to understand why Sanctions on Iran caused oil price to go up while Sanctions on Russia which produces more oil than Iran the effect on oil prices are reversed. I know Saudis are pumping more oil but they can pump all the oil they cannot makeup for the russian oil.

Sanctions have nothing to do with it. It is all about supply and demand. If the world economy is suffering, people have less money to buy oil - the price goes down. If supply is cut (by sanctions or war), the price goes up.

Recently, we (the world) are having an economic slowdown, worldwide. Additionally, at the same time, supplies are increasing, particularly as American fracking units come online. So, more supply + reduced demand == lower prices.

No one is prohibiting oil coming out of Russia. The sanctions are on financial products (loans) and Russia retaliating by sanctioning western food and a few other consumer products. No oil or oil-products involved. Ukraine and Russia Sanctions has an overview.

The closest western sanctions come to oil is impacting joint exploration projects and financing for projects. That won't cut production in the near term.

Sanctions on Iran are largely meaningless from an oil supply point of view - Iran just sells to China or India instead, so it doesn't materially affect the price of oil, just moves the buyers and sellers around a bit. In the longer term, the impact is that Iran has trouble increasing production, which has happened and tends to increase the price of oil. But, as you point out, Iran is not a big enough producer that it dominates or controls oil prices. No one is, anymore, you have to look at the whole market, everyone producing and consuming. Both are far more diversified than say, 1970 - China and India are accounting for larger and larger shares of the consumption - which makes sanctions of any kind, by anyone very ineffective. The sanctioned parties have plenty of alternative buyers or sellers.

 

[xyxmt]

Sanctions have nothing to do with it. It is all about supply and demand. If the world economy is suffering, people have less money to buy oil - the price goes down. If supply is cut (by sanctions or war), the price goes up.

Recently, we (the world) are having an economic slowdown, worldwide. Additionally, at the same time, supplies are increasing, particularly as American fracking units come online. So, more supply + reduced demand == lower prices.

No one is prohibiting oil coming out of Russia. The sanctions are on financial products (loans) and Russia retaliating by sanctioning western food and a few other consumer products. No oil or oil-products involved. Ukraine and Russia Sanctions has an overview.

The closest western sanctions come to oil is impacting joint exploration projects and financing for projects. That won't cut production in the near term.

Sanctions on Iran are largely meaningless from an oil supply point of view - Iran just sells to China or India instead, so it doesn't materially affect the price of oil, just moves the buyers and sellers around a bit. In the longer term, the impact is that Iran has trouble increasing production, which has happened and tends to increase the price of oil. But, as you point out, Iran is not a big enough producer that it dominates or controls oil prices. No one is, anymore, you have to look at the whole market, everyone producing and consuming. Both are far more diversified than say, 1970 - China and India are accounting for larger and larger shares of the consumption - which makes sanctions of any kind, by anyone very ineffective. The sanctioned parties have plenty of alternative buyers or sellers.

this brings us to the original post that Sanction are nothing but bullshit if Russian can sell oil as far as banning financial products and loans thats just like bull sitting on its own $hit if all the money is moving freely for oil transactions. Just banning diapers will produce zero results.

 

[nvKyleBrown]

this brings us to the original post that Sanction are nothing but bullshit if Russian can sell oil as far as banning financial products and loans thats just like bull sitting on its own $hit if all the money is moving freely for oil transactions. Just banning diapers will produce zero results.

First, I have said from the beginning that sanctions have nothing to do with oil prices, and won't break Russia in the near term.

In the longer term it will have more of an impact, just as with Iran, it will impede oil exploration and investment in new projects. Oil money coming in (for Russia) is already committed for non-oil spending. Russia has substantial social spending, military spending, and even a relatively large space budget. Getting investment for oil projects is VERY expensive, and the government doesn't have the money to do it. Further, they don't have the tech to do it, in spite of Russia-friendly commenters. Lots of big talk, but nothing to back it up with.

In the near term, Russia's problem is falling oil prices. Oil prices are falling without regard to sanctions. Sanctions aren't causing the fall, but the fall is hurting Russia badly anyways. Sanctioning countries may see it has a happy coincidence, but it is not caused (for the most part) by them.

Example of Russia's oil industry probems re: financing: Rosneft Said to Ask State for Up to $42 Billion on Sanctions - Bloomberg

Its not a killer in the short run, they'll work something out. In the longer run, this kind of thing really cuts into your ability to run new projects. If sanctions last (big if, IMHO), it will start hurting Russian production.

 

[FairAndUnbiased]

Russia has substantial social spending, military spending, and even a relatively large space budget. Getting investment for oil projects is VERY expensive, and the government doesn't have the money to do it. Further, they don't have the tech to do it, in spite of Russia-friendly commenters. Lots of big talk, but nothing to back it up with.

I don't know about Russian production being hampered. They've been an oil exporter since the 19th century, still are, and have a pretty well developed supply chain with pipes, refineries, construction equipment, drilling techniques and field management all worked out since the 1960's. No one has their combination of exceptionally large reserves in a country with exceptionally high education rates and an exceptionally low population density.