How much is R 1 Trillion, which Russia will surpass just about today or tomorrow. People who still do primitive math in USD will necessarily divide 1 trillion by a current Ruble to USD exchange rate and will get roughly $ 13.5 billion. Still huge sum but completely misleading, because Russians do not really pay that much attention to USD domestically and they love their Rubles, which, when adjusted for at least PPP, which still doesn't reflect the economic reality, because these Rubles will be spent primarily domestically, the actual "volume" of this sum grows dramatically.
E.g. This is the newest pr. 885M (Yasen M class) submarine Perm'. At the outset it is a designated carrier of 3M22 Zircon and its further modifications.
It is state-of-the-art. Her cost? R 41 billion. Just to demonstrate--if Russia would have decided to use all R Trillion on such submarines only, Russian Navy would have received ... 24 such submarines. What does the US Navy get for the exchange rate of $ 13.5 billion? Well, it gets one single CVN of Gerald Ford class (I will abstain from comments here), or it gets around 2.3 Virginia-class subs or five Arleigh Burke-class DDGs. For the same R 1 Trillion (or $ 13.5 billion) Russia can get 23 project 22350M (Gorshkov M class FFG) or as they call it Super-Gorshkov hybrid (heavy frigate-light DDG) which can load all of its 64 VLS with all kinds of hypersonic weapons and is capable with a single salvo sink something like Marine Nationale. That's just one frigate out of those 23. But you get my drift, right?
So, for a "final blow" and those who still don't get the message. Of course, Russia has poverty and poor people, of course Russia has shit-holes. Everybody does, but what is being missed constantly--outright extreme wealth in Russia is not admired, especially when flaunted. Yet, lookie-lookie, that's from the World Bank.
Somebody, get those ignoramuses to Russia (how about starting from Sarah Paine) and get them a tour (some CIA guys can join) of modern Russia from Kaliningrad to Vladivostok to get a grasp on why Russia is a first world high earning industrial society. Have a psychiatrist accompanying them, because they may need help due to a severest cognitive dissonance. Don't get them to Moscow or St. Petersburg immediately, start easy on them, like Khabarovsk or Omsk, let them acclimatize.
For people even remotely acquainted with energy issues and Cold War 2.0 (I suck at the former and have a clue on the latter) it shouldn't be a surprise to recall that Russia, a producer of Urals brand of crude, has (and had for a long time) her budget calculated with the base price of barrel of her crude of around $40. A year ago, ever-wrong Bloomberg--so, you see my conundrum here, it is near to impossible to find competent and objective observers of Russia in the US, so I have to get whatever I can--noted when reporting on Russia's balanced budget:
That was August 2019. Something tells me that these were not sanctions Putin was preparing Russia for--Russia lives under sanctions non-stop pretty much all her modern history, so there was very little strategic change in the way sanctions apply--slightly more, slightly less, who cares. My point is completely different here--feel free to browse my writing in this blog this year leading and during this whole oil prices snafu. As was stated--Russia did anticipate an implosion of oil prices and was ready for it way-way before the shit hit the fan, and that means Covid-19 too. And that, once one sees Russia de facto reaching today her very comfortable crude prices, while keeping US shale oil, and Saudis, under her thumb, tells about, pardon my pathos here, superb strategic planning and forecasting at Russia's top political level.
Of course, strategic planning is like that Electronic Countermeasure Thingy--that is if you have enough power to do so (hint: nobody has)--you can drown in noise pretty much a whole frequency spectrum in which combat electronics worked, works or will work. That will be not only modern iteration of Lope De Vega's (or if one wishes ancient Greek's fable) famous play of The Dog in the Manger, where one doesn't use whatever is at his disposal but also doesn't allow this whatever to be used by others. It is stupid, it is extremely energy consuming and in the end you suppress your own capabilities. But, of course, there is another way and this one goes way beyond Electronic Warfare, where modern ECM and ECCM systems detect, identify and counter almost instantaneously any kind of threat in a narrow frequency band. This applies to pretty much everything in life and is known, of course, as OODA loop. Ah those Observe and Orient truisms, when Colonel Boyd was writing about it he, of course, meant that whoever does this OO routine is observing and orienting oneself within reality. This art, however, as I preach for years, has been lost in the US for a long time now, while in other quarters this art transitioned as an organic part into the fully blown establishment dealing with this Observing and Orienting. No, it is not just intelligence alone, albeit it is part of it, very important at that, it is a whole complex of state and even private institutions who look dramatically different from the inside than all of the US think tankdom which is designed for merely one purpose: through providing sinecures for all kinds of characters from US military-political-intelligence and even business top to push all kinds of political agendas by means of "research" which, depending on who finances it, may, often does, arrive to mutually exclusive conclusions. Iraq's WMD, you know, cough-cough.... I vividly recall triumphalist declarations in all kinds of US compost media ranging from said Bloomberg to NYT, to all kinds of neoliberal globalist rags, on how Russia is about to go broke and Putin is going to lose his grip on power and how riots are about to break out in Russia, so you get the gist of this narrative, another false one in a long-long record of US media and "analysts" who do not seem to be able to get a grip. At that time, however, few paid attention to a rather calm and nonchalant predictions of Russia's energy minister Novak that things will come back to normal for Russia (and this normal is around $40 per barrel) really soon. Well, looks like Novak and this ever "losing popularity" Putin knew better. I will go out an a limb here and even propose such a ridiculous (not really) idea that Russians knew the essence of the game very-very early. Sometime early last year, I guess. And here is the point, yes, there is Moscow Stock Exchange, but it is primarily for as bunch which stole things in 1990s and nobody really gives a flying fvck, including Russia's government, about what is going on at Moscow's Stock Exchange. Feel the difference with the Western World? Yep, it is all about reality. And reality is such that Russian "liberda", which is a pretencious copy of American moneyed class, lost it big time.
Make no mistake, most of them are losers by definition and they exist only because Russians are civilized people and decided that they indeed reached the limit on revolutions. But get this:
This is today exchange rates for Ruble and this is in a stark contradiction to all those domestic and foreign "experts" who predicted Russia's demise with all that follows, like Ruble to USD as 200 to 1. For people, who have never been trained in real analysis and in a development of information into knowledge, the fact that, even with the start of oil wars and then "attack" of Covid-19, there was no rush of Russians buying foreign currencies, such as was the case in every modern Russia's crisis since 1990s, should have been the most important observation. But no, who observes anything when one can create own unicorns-run universe and orient oneself in it, instead of facing hard cold reality of a serious geopolitics which is formed by cold reality of power-balance which rests on the foundation of the sound economic theory. Even in 2007 the United States had a chance to change the world. It failed to do so because, as history shows, it can not learn even from own brilliant men and women. But I repeat myself. In conclusion, I increasingly begin to arrive to the point of view expressed by Karen Shakhnazarov that the whole "oil war" thing was conceived not by Saudis alone, but with the US blessing. We all know the result, don't we. It was forecast and anticipated in Russia.
While Dow Jones, which allegedly is an indicator of an "economic" health, or otherwise, of the US (and "global") specula...ahem, economies, is searching for the bottom somewhere in the depths of Wall Street and US financial fraud and extortion universe, let's see what Saudis, who think themselves smart and wonderful people are facing. Saudis declared that they will flood the world with cheap oil. Sure, why not. As some sources say, the "cutout" price for Saudi Arabia, that is when extracting stops being profitable, is somewhere around $25 per barrel. But let's take a look at Saudi 2020 Budget:
As you can see, Saudis, at the time of drafting this budget were optimistically thinking about some non-oil revenues (sure, gas or byproducts are already considered "non-oil" revenue, right?), but no matter how one sugar-coats all this budget and lovely graphics, one cannot fail to notice that (as red arrow points to) this crucial budget deficit of Saudi Arabia is not only gigantic (187 billion Ryials or $50 Billion) but tends to grow, while Saudi Arabia has very little to offer to the world other than hydrocarbons and exclusively Muslim tourism, known as pilgrimage, or Hajj. That's it. Even Bloomberg notices that:
Of course, it cannot. In fact, correct me if I am wrong, Saudis are living constantly (and dangerously) with their huge budget deficit and for a nation whose currency is directly tied to US Dollar and price of oil, it needs to finance somehow the habits of its population which still lives in middle ages and doesn't like to actually do any serious productive work. I do not consider driving Ferrari in the morning to some bank's branch in Riyadh to be a productive work in any way. So, Saudis, who are probably consulted by all kinds of old CIA spooks and other people who have zero real expertise in Russia and in real economy decided to go for the old (anti) Soviet trick--to kill Russia's economy with low oil prices. Sure. The problem, though, is in the fact that Russia IS NOT Soviet Union, which needed to carry on its back tens of millions of freeloaders from all those, now "free" from Russia, Soviet Republics (especially all kinds of Stans) but, as even World Bank notices:
Yes, yes, not only those Rooskies live with surplus in their budget, but they can painlessly allocate $150 billion to deal with whatever, for at least 10 years. Mind you, National projects are going full ahead and there will be (will be? It is already there) huge fight for those almost half-trillion USD by all kinds of foreign parties. You see, direct buying of the machines alone has more than $50 Billion allocated (and how many is indirect)--can you imagine what a fat piece of pie is that. Plus, Russia, unlike KSA, does stick to the plan and in 2017 already stated that oil and gas revenues only account for one third of Russia's budget revenues. Judging by 2020 budget, one can see that with the surplus budget, Russia's revenues from hydrocarbons and their processing will constitute around 36% of Russia's budget revenue. You decide yourself what is the share of oil in those 36%. But unlike Saudis, Russia produces everything else and most of it is for the internal market. Do I hear the word "autarky".
Of course, it is not exactly an autarky, but, do you see THIS difference for 2019?
That may help to explain why Saudis are going nowhere, because, as I write for years, tangibles win in the long run, and even if to imagine that somehow Saudis will survive next 4 years without consuming their $500 billion worth of reserves (sure, and I am Clint Eastwood) in the economy which produces next to nothing, Russia's National Projects will be already in their full steam and those are ranging from cutting edge research, aerospace, machine-building complex and other things of which Saudis have very little understanding. One doesn't play waiting game with superpower. Especially with one which is really pissed off with the chaotic murderous state the world was brought into, while historic Russia was learning her most important lesson the hard way, as was declared by Alexandr III: "Russia has only two allies, her Army and her Navy"(c). Let's add here VKS, and Strategic Missile Forces and that should wrap it up. I would suggest to listen to that, it is absolutely relevant:
