REALPOLITIK: ‘The Russian Economy’, ‘Small’, ‘Impotent’, ‘Insignificant’ – True or False?

Source – thesaker.is

  • “…Did Russia change overnight in 2015-2016? Was there panic on the streets, disorder and chaos, complete depredation and disintegration of society?…no such thing occurred in Russia, in fact it was barely noticed. Why? Because, the “Nominal GDP” is a fake, currency manipulated, symbolic number that has no actual basis in reality as pertains to the Russian economy”

The Russian economy – ‘small’, ‘impotent’, ‘insignificant’: true or false?

By Arcturus Le for the Saker Blog

In the west, there is perennial bluster about the putative ‘weakness’ of the Russian economy. It is widely accepted as ‘fact’ that the Russian economy is somewhere miserably outside the ‘Top 10’ global economies by GDP, sinking ever deeper year by year towards #15, embarrassingly behind such smaller countries as South Korea, Canada, Italy and on par with countries like Spain, Australia, and Mexico. In fact, many a snarky joke is bandied about on the Atlanticist web about how ‘Russia’s economy is barely the size of Texas’, etc.

This is a total western generated fabrication. In this article, I will prove the following points: that the Russian economy is actually ranked around the top 5 (and arguably even much higher) most powerful on Earth only behind China, US, Japan, and India; that the 2014 western engineered Ruble crisis crashed the specious ‘Nominal GDP’ of Russia by half while not affecting the true GDP nor economic output of Russia—and how this was affected by the geopolitical factors of the time; and that ‘Nominal GDP’ is a spurious canard that does not apply to Russia due to the fact that Russia is a trade surplus economy, and in fact PPP GDP is the accurate way to measure economies like Russia.

First, let us prove the opening point. Around 2014, oil was pricing steadily in the ~$100-115 per barrel range, as can be seen in the graphic below. Then, in 2014 a major geopolitical crisis developed. The U.S. and the CIA staged the Ukrainian coup called ‘Euromaidan’ that overthrew the legitimate Ukrainian government in the opening months of that year. A month later, Crimea held a democratic referendum and became once again Russian. This was a massive blow to the U.S. geopolitically for which Russia had to be punished as it had now grown too strong, winning a major warm-water port in Sevastopol that could now be used to threaten the western Imperialist/Atlanticist designs in the Middle East by way of a conveniently placed fleet access to the Mediterranean.

The Atlanticists took action and with their Saudi Arabian ‘partners’ (underlings) carried out a plan to crash the price per barrel of oil in order to hurt Russia as much as possible, since its economy at the time was still a bit more dependent upon oil and not as diversified as it is today. Such large tectonic shifts take time so their designs took a year or two to fully percolate down into the markets and by 2015-2016 the price of oil crashed from the aforementioned ~$100-115 per barrel range to the ~$40-50 per barrel range, becoming roughly ~50% of its original price. This chart below clearly demonstrates.

As can be seen, at this exact same time, the Ruble to Dollar conversion rate went from a low of roughly ~37 Rubles to 1 Dollar in 2014 (chart above) soaring to the range of ~60-75 Rubles to 1 Dollar the very next year to exactly coincide with the oil price crash. Miraculously, the devaluation corresponds to the exact timeline and severity of the crash of oil—oil dropped by half from ~$100 to ~$50 and Ruble went from ~35 to ~70 against the Dollar by 2015-2016.

As can be seen by the chart below, Russian GDP according to this source was $2,060 billion in 2014, and like magic by 2016 it was reduced to $1,282 billion. This represents a roughly ~40% decrease in line with the Ruble crash.

But, did Russia change overnight in 2015-2016? Was there panic on the streets, disorder and chaos, complete depredation and disintegration of society? After all, a halving of your GDP almost overnight is of such catastrophic proportions as to be unprecedented in history. Imagine, almost overnight the U.S. GDP going from its current figures to that of its 1960 figures (when it was half of today). What kind of chaos would ensue?

Of course, no such thing occurred in Russia, in fact it was barely noticed. Why? Because, the “Nominal GDP” is a fake, currency manipulated, symbolic number that has no actual basis in reality as pertains to the Russian economy. You see, the Nominal GDP in each country is priced in U.S. Dollars. This works for countries which are Trade Deficit countries. A brief discussion of the difference between Trade Deficit and Trade Surplus must ensue in order to fully understand this point. A country which operates on a Trade Deficit (which is most country’s in the world including the U.S.) simply imports more items than it exports. It is a country that relies on importing goods from other countries to survive. The reason this is important is because, since the global financial system operates on the U.S. Dollar basis in accordance with ‘Dollar Hegemony’ i.e. the Dollar as the reserve currency of the world, this means that when your country IMPORTS items, it is pricing them usually in Dollars. So, in short, this means that the price of your country’s native currency to Dollar conversion is important.

Let’s say you are a Trade Deficit country like India, and let’s say hypothetically that the Indian Rupee converts against the Dollar at 50 Rupees to 1 Dollar. That means, if you are buying an imported item that hypothetically costs $100, if your currency is magically crashed to where the Rupee now trades at 100 Rupees to 1 Dollar, instead of that $100 item costing you (50 x 100) 5,000 Rupees, it now costs you (100 x 100) 10,000 Rupees. So, if your country / entire economy thrives on imports, then one can clearly see how a currency devaluation of 50% can destroy your economy. It means every essential item you import, items vital to the economic engine of your country, have overnight become TWICE as expensive as before. This would lead to economic devastation.

But, what if your country is a TRADE SURPLUS country, a rarer breed of highly self-sufficient economies—a list comprising only the most advanced first world nations such as Germany, Japan, China, etc. Russia is in fact amongst this distinguished list. It has one of the largest trade surpluses in the world, while the U.S. is the world’s biggest Trade Deficit, by far.

So, what happens if you are a Trade Surplus country? This means that your country Exports more than it Imports. It means, in short, that the price conversion of the Dollar to your country’s currency is irrelevant because if you are generating everything your country needs within your own borders (self-sustainability), you are naturally pricing those items you yourself create in your own currency. So, what does it matter if the Russian Ruble goes from 30 Rubles to 1 Dollar, to 1000 Rubles to 1 Dollar? If you’re Russian and you’re not importing anything that’s priced in the Dollar, and you’re buying things within your own country priced in Rubles only, then it makes literally zero difference what the Ruble trades against the Dollar. Inside the borders of your own country, a Ruble is a Ruble, its price conversion to the Dollar has no relevance.

It can be seen here that a native currency devaluation does not have much meaning to a Trade Surplus economy. When a Russian citizen goes to a store and buys items, or a Russian company orders equipment or products, they are ordering them in Rubles because Russia makes their own goods and is self-sustaining. So even if the Ruble skyrocketed to 1 million Rubles to 1 Dollar it would be meaningless if you are not buying anything priced in Dollars.

This means that when the Russian Ruble crashed against the USD in 2015-2016 following the manufactured and engineered geopolitical crisis and massive currency manipulation by the corrupt U.S. global financial system, and the Russian Nominal GDP was shown to crash the equivalent rate (because the Nominal GDP is priced in USD), it was actually meaningless and the Russian economy in fact did not take any such major hit at all. The Russian GDP was shown to devalue from ~2 trillion to 1.2 trillion almost ‘over night’ only because it is being fraudulently priced in USD. All that happened was a mathematical calculation of irrelevant Dollar conversion, but actual Russian production and economic power and output did not experience any such effect whatsoever, it was a smoke and mirrors currency manipulation that existed only in the digital bits and bytes of a computer screen.

So, if we now know that the Russian GDP calculation was incorrect, what is the true way to measure it and what is the real Russian GDP? Since we know that Nominal GDP (which is priced in USD) is a fraudulent way to measure the economic power of Trade Surplus countries like Russia, the answer lies in PPP GDP. And of course, as expected, Russian PPP GDP is so high that it was announced by the IMF itself to have overtaken Germany for the #5 spot last year.

But what is most interesting is, prior to the fake ‘on paper’ devaluation of Russian Nominal GDP following the manufactured crisis of 2014-2016, even Russian Nominal GDP was near the Top 6-8 place (depending on which source you used, IMF, Worldbank, etc.). And now we see the PPP figure matches this rightful, accurate position.

But how do we know the PPP figure is accurate? Can we prove that PPP value is more in line with Russia’s true economic standing than the Nominal GDP value? Well certainly there are a few correlational indicators that can prove this for us. There are several indirect tell-tale signs that experts can use to look past fraudulent currency manipulated GDP numbers and gauge the real economic strength and productive virility of a country.

Let’s take a look at annual oil and electricity usage by country. These are important indicators that very closely correlate with a country’s economic power for reasons that should be self-evident: the more robust one’s economy, the more that country will be utilizing oil and electricity in the daily function and growth of that economic engine.

Some may be unconvinced, until looking at the chart above and seeing how well it correlates to the typical GDP standings. The chart shows oil consumption by country and in fact, the top 10 all looks quite similar to and closely mimics the PPP GDP chart. Russia here is seen at #6 just like in the PPP economic standings (where it is either #5 or #6 depending on source), NOT in #11-15 place as the fraudulent Nominal GDP would have you believe. The skeptic might ask, well wouldn’t a large population country be misrepresented on this chart because they use a lot of oil? To answer that, take Indonesia as an example, it has a population almost double that of Russia, yet it is somewhere in the ~15th place in the oil consumption chart, and not surprisingly that also roughly reflects its place in the GDP standings as well. So, as one can see the size of your country or population count is not reflected in the oil consumption chart, in fact it correlates directly to a country’s GDP, with one or two outlier/flukes such as Saudi Arabia which appears high on the chart owing to its over-reliance on gratuitously consuming vast amounts of oil in the process of producing oil and gas in their oil centered economy. The skeptic might similarly ask, well doesn’t Russia also produce a lot of oil? Yes but in this case, as I’ve said, its position in the oil consumption perfectly matches its GDP PPP position AND there are further indicators below that lay the doubts to rest.

Now let’s look at two other indicators of a robust economy, electricity production and consumption.

As can be seen here, the figures also mimic and correlate the GDP PPP figures. The same countries that dominate the Top 10 economies are seen either producing or consuming electricity at rates that correlate to their economic power. Not coincidentally, here too we see Russia placing near the Top 5, just like in the GDP PPP and quite unlike the fraudulent ~#11-15 placement we see in Nominal GDP. Now remember, these figures are not merely a product of population size. If that was the case, then countries with far larger populations than Russia like Indonesia, Nigeria, Brazil, Bangladesh, and Pakistan would all be way ahead of Russia on the list of energy consumption—yet they are no where on the list. Similarly, countries with SMALLER populations like Germany would not even be in the top 10. Yet Germany is an economic power house and despite having a much smaller population than Russia, appears close to it on the list in perfect accordance with its place on the GDP PPP chart. This clearly indicates that a country’s energy production/consumption is more closely tied to its economic power than mere population size.

Another indicator we can use is total Gold Reserves. These figures also mimic economic standing as only the most economically powerful countries appear in the top 10 in roughly a similar makeup as to their official GDP standings. Gold has long been a telltale indicator of a country’s might, prestige, and economic status. In the chart below, we can see once again, Russia ranks in almost the exact position of its GDP PPP standing as in all the other charts above.

Of course we can use many other indicators, for instance, global military standings. It is widely accepted Russia is at minimum the 2nd most powerful military force on Earth, and the military standings roughly correlate with the same countries in roughly the same positions as they are economically—with the familiar faces of U.S., Russia, China, India, Japan, et al, making up the top of the list. Would you really believe that a country with the acknowledged #2 military on earth is only ranked #15 economically, as per the fraudulent, currency manipulated Nominal GDP list? It beggars all logic. Of course the only rational explanation is that only a country whose economy is in the top 5 powerhouses can maintain the 2nd most powerful military in the world.

One can see that all indicators point to Russia being in the top 5 global economies and that even the fraudulent Nominal GDP figure had Russia at #7 or #8 (depending on source) prior to the artificially engineered oil crisis and currency manipulation that plummeted the Ruble in 2014-2016.

And one last important thing to note. All this discussion revolves around speaking of the Russian economy as if in a vacuum. But one can quickly forget that the Russian economy is arguably the most flagrantly assailed, beleaguered, manipulated, and sabotaged in the world by western/Atlanticist forces. The Russian economy has been under massive sanctions, sabotage, embargoes, etc, since the 2014 crisis began, and yet I have just shown that it is still roughly at the #5 spot right next to the powerhouse of Germany. So, what does this mean? Clearly, that even under intense sabotage and global economic warfare by the entire western political and financial system, even greatly weakened by western forces, the Russian economy is still roughly even with Germany, and only “behind” the U.S., China, Japan, and India (3 of which have vastly larger populations than Russia). Which makes the obvious point that the TRUE Russian economic power, adjusted for the various sanctions and sabotage, is even greater than we can imagine, most likely well ahead of the German and arguably even the Japanese economies.

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