The IMF, Rubles and the Russian Economy

Yeah, tell that to the guys who died fighting them in 1944 and 1945 (or let alone were killed by Kempeitai). Patton slapped dudes for stuff like this.

Okay, I guess you're right, Japan actually won WW2. How stupid of me not to already know that I guess.
 
I'm going to be charitable here, by financial ability do you mean political will?
When you run a country like Russia, these are one and the same. I'm still waiting for you to explain to me how Russia manages its war economy without raising rates.
The irony is palpable.
I also laid out my case, and it fits MUCH better the actual facts in actual reality about what actually happened than your delusions.
Yeah, okay man, go on thinking that Russia will lose any day now, I hear always expecting the best is a great way to win a war.
Okay, I guess you're right, Japan actually won WW2. How stupid of me not to already know that I guess.
Dude, did you really just gloss over the whole context of my analogy to be like "but Japan LOST that war?" To a guy in Chongqing it was not frickin losing that war. Likewise Russia should not be considered to be losing until they've been kicked out.
 
Yeah, okay man, go on thinking that Russia will lose any day now, I hear always expecting the best is a great way to win a war.
Actually my point was entirely about what were the initial objectives of Russia compared to what they are now, but I guess your reading is on par with your perception of reality - maybe there is a link.
 
Dude, did you really just gloss over the whole context of my analogy to be like "but Japan LOST that war?" To a guy in Chongqing it was not frickin losing that war. Likewise Russia should not be considered to be losing until they've been kicked out.

Your analogy is fatuous and, moreover, I suspect you know it is. History is full of examples of wars in which one side occupied a great deal of territory and nevertheless went on to lose the war in the end.

In fact, a key component of the stab in the back legend in Germany was that Germany hadn't really lost world war 1 because it was still occupying Allied territory and none of its own territory was occupied when it asked for an armistice. Indeed, by your logic Japan had already won the war because it continued to occupy China right up until it capitulated.

You refuse to look at the war as a dynamic situation. Pointing to all the occupied territory and pretending it meant they were winning is literally what Hitler and his generals and entourage spent 1943 and 1944 doing.

Again, I suspect you understand all this pretty well, but you need NATO to be losing and the insufferable liberals in this thread to be wrong for emotional reasons so you're pretending not to understand it.

I will add that I don't think we are going to see anything like a total defeat of Russia the way Germany and Japan were defeated but the tide has been running against Russia for a long time now. Measured against what Russia hoped to accomplish, Russia lost this war in its opening days and lost it badly.
 
When you run a country like Russia, these are one and the same. I'm still waiting for you to explain to me how Russia manages its war economy without raising rates.
Price controls and rapid inflation just like every other country that wins a war for survival.

How much poorer is the math. Poorer and home with your kids, with time to use the bad laundry detergent, the hard to cook ingredients, the time to change your own tires, learn new skills, that is just simply different than poorer while working overtime, missing baseball games and paying somebody else to watch your kids because you, or both* of you, are gone. That's not math, that's qualitative. Thriving, or not. Destitute steals your time, too. Are we talking destitute?

*lucky you, singles don't make it work in these situations nearly as well, and that'd be math again.
I see what you are saying, but then what's the optimal situation here? When times were harder my dad was definitely less around. My parents fought more, my stress was way way up. But I also think to when I had no income and no prospects, yes it sucked but it was nice to see friends and walk everywhere and learn to cook.

But what's optimal in general? If you have 10 people available for work, how many should work? All 10? Do we want to rotate 1 out, without compensation? Do we rotate 9 out? 10 and go back to the woods until the trading partner is back and we can resume at a good level?

The poverty that will cause the inflation can't be avoided. It can be exacerbated if more people stop working, then you have even less supply and less demand, that problem is double. Someone not producing or adding efficiencies but still buys things is being inflationary to themself and everyone else. To beat a supply crunch you have to build new supply, people have to work to make this happen. If price increases outpace wages so much you're all set back 20 years (like cut income in half), should you quit the labor force? Should people 20 years ago have not worked because it isn't as good as today minus the price rises?
 
USA lost several proxy wars while being in comfortably Cold War mode. One more won't hurt.
I think that’s what Putin was counting on.
 
Withdrawal would be pretty quick
 
Price controls and rapid inflation just like every other country that wins a war for survival.


I see what you are saying, but then what's the optimal situation here? When times were harder my dad was definitely less around. My parents fought more, my stress was way way up. But I also think to when I had no income and no prospects, yes it sucked but it was nice to see friends and walk everywhere and learn to cook.

But what's optimal in general? If you have 10 people available for work, how many should work? All 10? Do we want to rotate 1 out, without compensation? Do we rotate 9 out? 10 and go back to the woods until the trading partner is back and we can resume at a good level?

The poverty that will cause the inflation can't be avoided. It can be exacerbated if more people stop working, then you have even less supply and less demand, that problem is double. Someone not producing or adding efficiencies but still buys things is being inflationary to themself and everyone else. To beat a supply crunch you have to build new supply, people have to work to make this happen. If price increases outpace wages so much you're all set back 20 years (like cut income in half), should you quit the labor force? Should people 20 years ago have not worked because it isn't as good as today minus the price rises?
It's a good question. But policies that cause inflation are a tax. Just one buried behind an additional mechanism.
 
Price controls and rapid inflation just like every other country that wins a war for survival.
Please give some examples so we can explore this point in detail.
The poverty that will cause the inflation can't be avoided. It can be exacerbated if more people stop working, then you have even less supply and less demand, that problem is double. Someone not producing or adding efficiencies but still buys things is being inflationary to themself and everyone else. To beat a supply crunch you have to build new supply, people have to work to make this happen. If price increases outpace wages so much you're all set back 20 years (like cut income in half), should you quit the labor force? Should people 20 years ago have not worked because it isn't as good as today minus the price rises?
But what Farm Boy is trying to point out to you is that the Russians will continue to work anyway. Some of the lost surplus was not efficient or not necessary, even if it kept the wheels greased and kept things moving. But on a macro scale, they don't actually need to develop constant new supply because they just let that demand go unfilled, and fill the demand they can. It's tightening your belts. From a micro perspective it's insane: everyone should move away, all businesses should close, no more activity should happen. But you know something? That's the beautiful thing about running a peripheral tinpot dictatorship. You can just ram the micro. The macro shakes it all out, and you're laughing because your entire population can't actually move away. The exponential curve is actually a sigmoidal one and levels off at a new "norm."

Like we keep going up and down this point that Russia's economy is suffering in some particular ways, but that this should not be confused for general instability. Keeping interest rates low might hurt the economy but does it hurt the state's ability to wage the war? When the state's strategy of selling oil and buying Chinese are still fully viable options? Economies aren't that vulnerable, generally speaking. Price shocks happen. Shortages happen. There needs to be something more.
 
So if I buy something is that a tax because that also causes inflation
Don't deliberately mix your macro peas with your micro porridge, it's bad practice.
 
Don't deliberately mix your macro peas with your micro porridge, it's bad practice.

All spending drives inflation, that's macro.
I'm also curious - if inflation is a tax, then is deflation analogous to a transfer payment or something?
 
It can be? When the yuan inflates, depreciating the relative dollar, dollars purchase more plastic.

The additional mechanism has knock on effects*. Unstable value in the currency of exchange is nearly always going to disadvantage everyone not tapping professional finance. They're going to outcompete on the fluctuations and accumulate real productive resources. Unless that's regulated to not be allowed.

*like preserving or creating industry, which is control and power. If you think somebody is getting too good a deal trading printed money for real resources, remember hogs don't pay for grain until later.
 
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All spending drives inflation, that's macro.
Yeah all spending, but not any spending. The reason is because the influence of that purchase on the money supply can't actually be assumed. What you are describing is a micro truth you are extrapolating to the macro. Spending is a fundamental pathology of inflation, so all spending is inflationary. But we don't actually measure inflation based purely on GDP do we? There are the pathologies of the money supply to consider when making that step and reductive quips that treat money like any other commodity are not going to get at that.

Farm Boy is absolutely right that inflation functions like a tax on your savings.
 
real interests equally value nominal interest rates and the rate of inflation. Is lowering the interest rate a tax equal to its percent drop?
 
real interests equally value nominal interest rates and the rate of inflation. Is lowering the interest rate a tax equal to its percent drop?
Yeah, it is. A really low interest rate is designed to drive money out of savings in general. It increases the value of commodities relative to money. But what it really does is increase the value of property relative to money. That's the point of "making money cheap," that you can leverage more and more cheap money against more and more real growth, and every little bit you can get the money cheaper is more growth you can eke. Then all the difference is gravy, on the order of 2%, 4% per year. But this model of wealth expansion is all pretty much collected in dividends - not wages. That's how we've reached the situation we're at now in the US where the economy looks really good from the top, but really, really bad from the bottom.

Employment in the US right now is below the previously held theoretical natural unemployment rate. This is pretty significant if for no other reason than it means labor is batting even lower than it was back then. And it's been batting pretty low. This is what we call a "contradiction" and eventually, somethin's gotta give.
 
Yeah all spending, but not any spending. The reason is because the influence of that purchase on the money supply can't actually be assumed. What you are describing is a micro truth you are extrapolating to the macro. Spending is a fundamental pathology of inflation, so all spending is inflationary. But we don't actually measure inflation based purely on GDP do we? There are the pathologies of the money supply to consider when making that stend reductive quips that treat money like any other commodity are not going to get at that.

Farm Boy is absolutely right that inflation functions like a tax on your savings.


All (and any) spending drives inflation because of the velocity of money, it has nothing to do with the money supply per se. If people are spending rather than holding on to money, that implies a reduction in the value of money relative to anything someone might want to exchange for it. Which, yes, reduces the value of savings. But deflation is much worse in terms of its real costs and deflation has historically been used as a tool of class warfare by the moneyed classes, most notably in Britain after the end of the Napoleonic Wars.

It can be? When the yuan inflates, depreciating the relative dollar, dollars purchase more plastic.

The additional mechanism has knock on effects*. Unstable value in the currency of exchange is nearly always going to disadvantage everyone not tapping professional finance. They're going to outcompete on the fluctuations and accumulate real productive resources. Unless that's regulated to not be allowed.

*like preserving or creating industry, which is control and power. If you think somebody is getting too good a deal trading printed money for real resources, remember hogs don't pay for grain until later.

Forex isn't inflation. A forex ratio is one price, inflation by definition is all the prices.
 
All (and any) spending drives inflation because of the velocity of money, it has nothing to do with the money supply per se.
Dude, how is the velocity of money calculated?
 
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