Do sanctions mean anything to Russia?

[backseatjuan]

Let's say we have a single bank and our entire world consists of 3 people.



Each one of those people goes to the bank and takes $10 in credit for 1 year, under 10% yearly interest. After the year is over, each of our 3 people will have to pay bank $11, but each one of them have only $10. What to do?

So person #1 goes to person #2 and offers a service, he says hey dude #2, I will suck your c0ck for $1, and dude #2 agrees and gives dude #1 $1. Person #1 pays off his debt.

But now person #2 realizes he has to pay off $11 to bank, but he only has $9. What to do? So person #2 decides to go to person #3 and suck his c0ck for $2, and thus person #2 pays off his debt.

But now person #3 can't pay his debt off, he is outsider, bankrupt, he either will have to take more credit to pay his existing credit, or go suck some d1ck until he can pay off his debt.

This is how free market economy works, more or less. People are forced to work hard and always increase their capitol.

Now let's say our community of 3 people don't have all the goods manufactured in their 3 people country. So they go ahead and purchase their stuff - cars, computers, etc - from a foreign nation, let's say Europe, USA. So what that means? That means money is flowing out of 3 people community, and into foreign nations.

Russia is much like this scenario, Russia does not have a lot of manufacturing, and its products aren't competitive, so there is a tremendous cash flow out of Russia into USA and Europe. People buy stuff, clothes, cars, electronics, etc, from USA and Europe. Russian economy suffers from this.

Sanctions just mean people will buy less stuff from USA and Europe and less cash will flow out of Russia. At the same time sanctions mean local products will have less competition. So sanctions is a good thing for Russian economy.


And here we are, the United States can't do anything militarily, and threat of sanctions just don't mean anything to Russia. USA is like Obama's naked arse, threatening a hedgehog (Russia) -- hey hedgehog, I'm gonna sit on you if you....... http://s020.radikal.ru/i707/1303/17/9976e0815f3a.jpg


Now a bit more complex, there are two gas pipelines that go to Europe, they threaten to freeze the projects. But what does that mean? Gas will be sold to someone else, China, Brazil, India. Europe will have to pay more money to get same gas from some other place.


In the end, we have mighty Russia and her interests in Crimea, and all the west can do is just b1tch and cry and whine.



So all that talk you hear on TV about sanctions, that's total crap, just b1tch talk, nothing really they can do. Situation is hopeless. Because you just can't threaten a hedgehog with a naked arse, the needles will hurt your arse.

 

[taiyuu_otoko]

Your illustrations have a few incorrect assumptions, or it's an incorrectly chosen metaphor for how free market banking works.

Each one of those people goes to the bank and takes $10 in credit for 1 year, under 10% yearly interest. After the year is over, each of our 3 people will have to pay bank $11, but each one of them have only $10. What to do?

So person #1 goes to person #2 and offers a service, he says hey dude #2, I will suck your c0ck for $1, and dude #2 agrees and gives dude #1 $1. Person #1 pays off his debt.

But now person #2 realizes he has to pay off $11 to bank, but he only has $9. What to do? So person #2 decides to go to person #3 and suck his c0ck for $2, and thus person #2 pays off his debt.

But now person #3 can't pay his debt off, he is outsider, bankrupt, he either will have to take more credit to pay his existing credit, or go suck some d1ck until he can pay off his debt.

This is how free market economy works, more or less. People are forced to work hard and always increase their capitol.

First of all, no bank would give somebody a loan unless they had decent credit, AND some kind of assets. So the third guy in your example would have to fork over whatever he used to secure the debt. (like a coupon for ten BJ's or something)

Second of all, in a truly free market economy credit is only created when somebody feels they can make more than the bank interest rate with the borrowed money.

Third, societies have more than three people, or else banks would never come into existence. Banks always assume a certain amount of default, which is built into their business model. They naturally limit defaults by making the lending requirements pretty strict.

Now let's say our community of 3 people don't have all the goods manufactured in their 3 people country. So they go ahead and purchase their stuff - cars, computers, etc - from a foreign nation, let's say Europe, USA. So what that means? That means money is flowing out of 3 people community, and into foreign nations.

Russia is much like this scenario, Russia does not have a lot of manufacturing, and its products aren't competitive, so there is a tremendous cash flow out of Russia into USA and Europe. People buy stuff, clothes, cars, electronics, etc, from USA and Europe. Russian economy suffers from this.

What you're describing is a trade imbalance. Russia has a trade SURPLUS of $18 Billion. Meaning they sell more stuff than they buy.

(source: http://www.tradingeconomics.com/russia/balance-of-trade )

Most of this is by selling oil and natural gas.

The U.S., on the other hand, DOES have a huge trade deficit, in large part due to Triffin's Paradox. http://en.wikipedia.org/wiki/Triffin_paradox

Sanctions just mean people will buy less stuff from USA and Europe and less cash will flow out of Russia. At the same time sanctions mean local products will have less competition. So sanctions is a good thing for Russian economy.

Russia sells oil and natural gas to Europe, not clothes from the United States. Sanctions will be very harmful to Russia. Which is why Putin threatened to dump U.S. bonds (and weaken the dollar) if sactions were put in place.

Now a bit more complex, there are two gas pipelines that go to Europe, they threaten to freeze the projects. But what does that mean? Gas will be sold to someone else, China, Brazil, India.

And Russia would very much like them to pay in gold, instead of U.S. dollars as is the current arrangement. That would KILL the U.S. economy.

Europe will have to pay more money to get same gas from some other place.

Where exactly? And how much are they willing to pay?

In the end, we have mighty Russia and her interests in Crimea, and all the west can do is just b1tch and cry and whine.

Nope, we've got this:

The economically backward Russians (the only country to ever SELL more oil than they use, and still be dirt ass poor), and they're equally backward buddies the Chinese, who have been trying for YEARS to dump the dollar and come up with some alternative currency.

vs.

The global elite bankers who have been running U.S. and Western governments for CENTURIES (where the main benefit is buying oil with printed and worthless money) and would literally FIGHT A NUCLEAR war to maintain the dollar supremacy.

Now, HERE'S an interesting bit of information:

Gazprom Chairman Sold All His Shares Just Before Russia Invaded Crimea

We are sure it is just coincidence - and awkward combination of luck and suspicious timing - but Vedomosti reports that Viktor Zubkov, the Chairman of Russia's massive energy monopoly Gazprom, dumped his entire stake in the company just a few weeks before Vladimir Putin crossed the red line. Gazprom shares have dropped 25% in the last 3 weeks so his timing was impeccible.

Now, if sanctions were so good for Russia, why is the biggest oligarch in the country DUMPING his shares in the energy company?

 

[backseatjuan]

Yankees are just too dumb to understand Russian economy.

Hey folks, we don't have competitive products in Russia, we like foreign everything, from toilet paper to cars and building materials.

If tomorrows Mercedes can't sell to Russia, it will fire thousands of employees, German economy will suffer.

If tomorrow Jeep can't sell to Russia, it will need a government bailout.

If tomorrow we don't travel to Europe, they will feel it. We aren't cheap Americans, we have cash to spend. 80% of our economy is government budget organizations, we steal, we have corruption. $100,000 per year is not considered money in our country.


If you stop export of gas and oil form Russia, you gonna go get it else where, and simply through the laws of supply and demand, it will cost you more, and you will feel it. Are you going to tell me that Americans don't whine a lot when the price of gas is high?


Sanctions simply mean weakening of western economies, and strengthening of BRIC economies. BRIC = Brazil, Russia, India, China. Plus yes, US dollar currency dumpage.


As far as World War 3, monetary conspiracy, go fak urself.



P.S. Be very careful about information on Russia you read on the internet. There is a whole army working, placing all kind of misleading information.

 

[VikingKing]

Yankees are just too dumb to understand Russian economy.

Hey folks, we don't have competitive products in Russia, we like foreign everything, from toilet paper to cars and building materials.

If tomorrows Mercedes can't sell to Russia, it will fire thousands of employees, German economy will suffer.

If tomorrow Jeep can't sell to Russia, it will need a government bailout.

If tomorrow we don't travel to Europe, they will feel it. We aren't cheap Americans, we have cash to spend. 80% of our economy is government budget organizations, we steal, we have corruption. $100,000 per year is not considered money in our country.


If you stop export of gas and oil form Russia, you gonna go get it else where, and simply through the laws of supply and demand, it will cost you more, and you will feel it. Are you going to tell me that Americans don't whine a lot when the price of gas is high?


Sanctions simply mean weakening of western economies, and strengthening of BRIC economies. BRIC = Brazil, Russia, India, China. Plus yes, US dollar currency dumpage.


As far as World War 3, monetary conspiracy, go fak urself.



P.S. Be very careful about information on Russia you read on the internet. There is a whole army working, placing all kind of misleading information.

Why do you hate the U.S. so much any way? I say jealously. Its like the angry, bitter, afc who loathes the alpha who can get women with minimal effort.