Miscellaneous News

vincent said:

Actually your idea is not that great because fiat currencies from Western countries are next to worthless to Russia. The USD, Euro, Yen, etc Russia Central Bank receives are of little use because of the sanctions. All the new Rubles will flow back to Russia as payment for the fossil fuels and will lead to inflation because of the extra money supply, unless the Russia central bank soak them up.

Another method for countries to get Ruble/RMB is to issue bonds in Rubles/RMB and are bought by Russian/Chinese Central Bank. Russia and China will be providing other countries fiat moneys to buy their products (fossil fuel from Russia and consumer and industrial good from China). Same as above, the result will also be inflationary because the new money will go back to Russia and China, unless their central banks use money market operations to soak up the extra liquidity.

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USD, Euro, Yen are still useful to Russia for using them to buy goods and services offered by countries that still trade with Russia, as those countries accept and can use the G7 currencies. Obviously though, holding other foreign currencies as reserves other than G7 ones is preferred.

Anyway, my point is that it doesn't make sense at all for Russia to hold Rubles as reserves.

Damn it, I broke my promise...

Most Russian banks, at least the largest ones, cannot use SWIFT to transfer money in USD, Euro, or Yen. The Russian Central Bank cannot hold foreign currency accounts in those currencies either. I think the only reasonable way is for Russia to increase its hard assets be it gold, palladium, platinum, or whatever.

gelgoog said:

Most Russian banks, at least the largest ones, cannot use SWIFT to transfer money in USD, Euro, or Yen. The Russian Central Bank cannot hold foreign currency accounts in those currencies either. I think the only reasonable way is for Russia to increase its hard assets be it gold, palladium, platinum, or whatever.

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Are you sure? I'm not aware of that the Russian Central Bank account in BIS has been frozen. Happy to be stand corrected though.

As for SWIFT, there're enough Russian banks that can still access it, Gazprom is one. Which is why Putin mandated all gas payments must be paid in Rubles via buying Rubles through an account that can't be sanctioned by the West, so Russia can still have access to foreign currencies.

Guess what?

India getting the hell out of IPEF, that Indo-Pacific strategy looking a bit shaky.

texx1 said:

Are you being a bit premature about Chinese are coming? Li's statements are not very different from what Chinese government has been saying since beginning of the war.

There are media reports of Xi meeting Putin next week in Uzbekistan as Xi's first trip oversea since the covid outbreak. But Chinese MFA didn't confirm the trip when asked in its daily briefing.

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Let's not take measures without considering changes in circumstances. When the West claimed support for Ukraine at the beginning of the war we only saw shoulder-launched rocket launchers, now what? The West's claimed support has become tanks, artillery and armored vehicles. It is not in China's interest for Russia to fail quickly, nor is it in China's interest for Russia to have to delay this war for very long. China's assistance has never been conspicuous. Previous support has included providing drones and bridge-building tools to East Ukraine, so what about now, when the West is once again looking to escalate military aid? It is likely that they have agreed to help Russia to ensure and even improve the productivity of product 305. And the supply of chips is entirely claimable for civilian use.

Shadow_Whomel said:

Let's not take measures without considering changes in circumstances. When the West claimed support for Ukraine at the beginning of the war we only saw shoulder-launched rocket launchers, now what? The West's claimed support has become tanks, artillery and armored vehicles. It is not in China's interest for Russia to fail quickly, nor is it in China's interest for Russia to have to delay this war for very long.

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Chinese government's official position on the current Russian invasion has been neutral all along. China is unlikely to change that since providing military equipment to Russia would risk massive US sanctions and asset seizure. I don't expect this to change even after Putin Xi meeting.

Shadow_Whomel said:

China's assistance has never been conspicuous. Previous support has included providing drones and bridge-building tools to East Ukraine, so what about now, when the West is once again looking to escalate military aid? It is likely that they have agreed to help Russia to ensure and even improve the productivity of product 305. And the supply of chips is entirely claimable for civilian use.

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When did Chinese government supply drones to Russian arm forces or the separatist forces? Russia wouldn't be buying UAVs from Iran if China was willing to supply them.

In case, you were referring to commercial DJI drones Ukrainian purchased off the internet, that's not a transfer of arms by China. Besides DJI has suspended sales in both Russia and Ukraine since April for fear of US sanctions.


In fact, DJI is so sensitive about its drones being used in this conflict; it issued a statement disavowing military use and reemphasizing its civilian use nature when Russian embassy in China praised DJI drones on weibo.

Russian embassy in China praising DJI drones have revolutionized artillery warfare.




DJI's response

jwnz said:

I think there's confusion on what are considered money printing, current account, reserves, etc.

Central banks do "print money" all the time as in increasing money supply and reducing it as well to support and match economic activities. This is done between a central bank and commercial banks, one method is by changing the bank reserve requirements, so banks can increase or have to reduce the amount of lending on their books, hence changing the money supply, another means is to change the interest rates. These actions usually are not inflationary as they are carried out to match money supply to support the underlying economic activities.

When people talk about money printing or QE though, that's when a central bank issues new money to buy govt bonds to support govt spending when tax income is not enough, that's usually inflationary.

As for keeping Rubles in Russia's current account, I assume it's referring to the BIS; in which case it makes no sense at all. If foreign countries need to buy rubles to pay for Russian exports, they would do so either through other countries with excess rubles to sell or buy from Russian central banks via commercial banks. If it's through the Russian central bank, it can simply "print" rubles and in turn earn foreign currencies which can be used to pay for imports or buy foreign assets. The "printing" in this case is supported by the exporting so it's not inflationary. There's no need to keep rubles in its current account as reserves.

Note: this is my last post in this matter as I'm sure readers of this thread have had enough of economics 101 already

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Only the US dollar acting as the global reserve currency can print money with little effect on its inflation. This of course is being eroded but it is still the case. In the case of Russia, they cannot simply print money without exacting inflation. This might not be immediately apparent in the case of trade flows but it does affect the currency value relative to other currencies over time.

I think you might be referring to my use of the words "account surplus" somewhere and related this with foreign currency reserves or some other relationship since you mentioned the BIS. I was referring to the surplus from their oil and gas trade and how it is saved as Rubles. That trade as it pertains to the Ruble, is circular in nature because the extraction, processing and transport of gas/oil begins in Russia with Rubles, traded in Euros and US Dollars and is exchanged back to Rubles. That surplus saved as Rubles is basically like a budget surplus in Russia that like I said is similar to a worker saving their salary for a rainy day.

Chinese president to attend SCO summit, visit Kazakhstan, Uzbekistan
Xi visiting Kazakhstan should be something very big related to BRI, considering this visit was announced almost a year ago.
The BRI was announced by Xi in Kazakhstan in Sept of 2013, this seems like a big announcement on the 9th anniversary.

Appix said:

India to support US-proposed price cap on Russian crude oil only if supplies from Venezuela, Iran assured​

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Oil cap means no oil that's why India is worried and wanna to assure oil resource, no matter it's from.

Top Chinese legislator pays official goodwill visit to Russia

By Xinhua Published: Sep 11, 2022 09:36 AM Updated: Sep 12, 2022 07:46 AM



Li Zhanshu, chairman of China's National People's Congress (NPC) Standing Committee, meets with Russian President Vladimir Putin in Russia's far eastern city of Vladivostok, Sept. 7, 2022.Photo:Xinhua

Li Zhanshu, chairman of China's National People's Congress (NPC) Standing Committee, paid an official goodwill visit to Russia from Wednesday to Saturday, at the invitation of Chairman of the Russian State Duma Vyacheslav Volodin.

During his visit, Li met with Russian President Vladimir Putin in the country's far eastern city of Vladivostok, held talks with Volodin and Russian Federation Council Speaker Valentina Matviyenko respectively in Moscow, and also met with leaders of the five State Duma factions.

When meeting with the Russian president, Li conveyed cordial greetings and best wishes from Chinese President Xi Jinping to Putin. He said that under the strategic guidance and personal efforts of President Xi and President Putin, the China-Russia comprehensive strategic partnership of coordination for a new era has maintained a strong momentum of development.

Political mutual trust, strategic coordination and pragmatic cooperation between the two countries have reached an unprecedented level, setting a good example of good-neighborly friendship and win-win cooperation between major countries and neighboring countries, Li said.

Both China and Russia are at a critical historical stage of development and revitalization, enjoying great potential and broad prospects for cooperation, Li said.

China is willing to continue to work with Russia to firmly support each other on issues concerning each other's core interests and major concerns, implement the Global Development Initiative and Global Security Initiative put forward by President Xi, and turn high-level political mutual trust into more pragmatic cooperation results, Li said.

The top Chinese legislator said he firmly believes that under the leadership of President Xi and President Putin, the two sides will raise the bilateral ties to a new level and will follow the development path in line with their national conditions and achieve the great goals of their respective development and national rejuvenation.

Li also congratulated Russia on successfully hosting the 7th Eastern Economic Forum and briefed on the upcoming 20th National Congress of the Communist Party of China.

Putin asked Li to convey his best wishes to President Xi. He said that the Russia-China comprehensive strategic partnership of coordination for a new era is special and important, and that the Russian side is satisfied with bilateral relations and cooperation with China in various fields.

Russia-China trade, especially against the backdrop of the COVID-19 pandemic, has shown a sound momentum of growth, Putin said, expressing his belief that the two sides will achieve greater goals of cooperation in this area.

More exchanges between the Russian and Chinese legislatures will play a positive role in promoting the development of bilateral relations, Putin said. He also wished the 20th National Congress of the Communist Party of China a success.

During his talks with Volodin and Matviyenko, Li said that the important task of cooperation between the legislative bodies of China and Russia is to promote the implementation of the important consensus reached by the two heads of state and provide legal protection for the healthy and stable development of bilateral relations.

The NPC will continue to deepen exchanges and cooperation with the Russian State Duma and Federation Council, tap the potential of the mechanism for regular exchanges, maintain a good momentum of high-level exchanges, and promote exchanges among friendship groups and special committees, Li said.

Li said that the NPC is ready to work with the two institutions to create a favorable environment for practical cooperation through legislation as well as examination and approval of treaties and agreements.

He added that the two sides should strengthen exchanges of experience on national governance and legislation regarding fighting against external interference, sanctions and long-arm jurisdiction, among others.

Li thanked the Russian side for firmly supporting China on the Taiwan question.

Both Volodin and Matviyenko once again condemned Speaker of the US House of Representatives Nancy Pelosi's visit to China's Taiwan region, saying that Russia firmly adheres to the one-China policy and is willing to deepen cooperation with China on the basis of mutual respect, equality and mutual benefit.

Volodin said that the legislative bodies of Russia and China should further upgrade their cooperation, expand cooperation models, enrich cooperation content, so as to jointly implement the important consensus reached by the two heads of state and contribute to the development of bilateral relations.

Matviyenko extended congratulations on the great achievements made by the Chinese people under the leadership of the Communist Party of China. She said that the in-depth development of Russia-China relations has given the legislative bodies a new task of cooperation, and that both sides should actively promote cooperation in such fields as politics, economy, trade, finance and youth, as well as enhance sub-national, people-to-people exchanges and cultural cooperation.

When meeting with leaders of the five State Duma factions, Li said that all the groups have demonstrated their support to enhancing friendly cooperation with China, showing that it is the broad consensus of all parties and people from all walks of life in Russia to develop the China-Russia comprehensive strategic partnership of coordination for a new era.

China is ready to maintain close contact and exchanges with all parties in Russia to consolidate the foundation of the friendship and practical cooperation between the two countries, he said.

Leaders of the five State Duma factions expressed their willingness to play an active role in intensifying inter-party exchanges between Russia and China, and make unremitting efforts to deepen the development of Russia-China relations, so as to benefit the two countries and their people.

During his stay in Moscow, Li laid a wreath at the Tomb of the Unknown Soldier and visited Vladimir Lenin's former residence.


Li Zhanshu, chairman of China's National People's Congress (NPC) Standing Committee, meets with Russian President Vladimir Putin in Russia's far eastern city of Vladivostok, Sept. 7, 2022.Photo:Xinhua

Li Zhanshu, chairman of China's National People's Congress (NPC) Standing Committee, holds talks with Vyacheslav Volodin, chairman of the Russian State Duma, in Moscow, Russia, Sept. 8, 2022.Photo:Xinhua

Li Zhanshu, chairman of China's National People's Congress (NPC) Standing Committee, holds talks with Russian Federation Council Speaker Valentina Matviyenko in Moscow, Russia, Sept. 9, 2022.Photo:Xinhua


Li Zhanshu, chairman of China's National People's Congress (NPC) Standing Committee, meets with leaders of the five State Duma factions in Moscow, Russia, Sept. 9, 2022.Photo:Xinhua