Alexander — Russia defies Western expectations; ends 2017 with minimal budget deficit, bigger reserves

The US thinks it can "bankrupt" Russia with sanctions.

Contrary to Western claims Russia in 2017 did not ‘run out of money’…

What is extraordinary is not that Russia has not run out of money. It is that supposedly serious people in the West ever thought it would.

The dismal truth is that no economic catastrophe in Russia is too farfetched to prevent some people in the West predicting it, whilst there is never any penalty for these people when regular as clockwork the predicted economic catastrophe fails to happen.

The problem for Russia is that the Russian government think that this is a possibility to be guarded against.

The obvious fact is that as currency sovereign, Russia limited in currency issuance only by the availability of real resources, which can also have an effect on the price level and exchange rate. The exchange rate is relatively meaningless, but inflation could be an issue. However, the trend has been a falling price level.

Russia needs to realize the policy space it has based on the increase in  fiscal space resulting from floating the ruble. Russia needs to increase public investment and social welfare, which would also result in stimulating the consumer economy through increased incomes....

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Russia defies Western expectations; ends 2017 with minimal budget deficit, bigger reserves

Alexander