16:18 GMT +320 February 2017
    Banknotes of US dollars and rubles

    Russia's Not Afraid of Crisis ‘Because Its Economy Is Unsinkable'

    © Sputnik/ Alexandr Demyanchuk
    Get short URL

    In spite of the difficult economic situation, Russians remain calm, because they believe in the stability of the state and "floodability" of the Russian economy, German financial analyst Matthias Siller said in an interview with Finanz und Wirtschaft.

    Since Russia managed to achieve a high degree of self-sufficiency, the threat of inflation and bank failures is very low, the expert said.

    According to Siller, Russian residents are "surprisingly quiet" compared to the "panic attacks" in the past. "Russians have become poorer, but none of them really believed in the prospects of wealth," the expert explained.

    In his opinion, there is currently no threat of the state's insolvency because the Kremlin managed to make Russia's economy "unsinkable".

    Despite the dropping ruble, serious inflation is unlikely: in this regard, the decision of the Central Bank in 2014 not to intervene in the foreign exchange market was of great importance because now the Russian financial system is flexible and the threat of bank failures almost does not exist.

    Russian authorities have made several mistakes, Siller said. For example, the development of high-tech centers initiated by the government has failed.

    "However, in the private sector Russia has achieved more than, for example, Kazakhstan," the analyst claimed. In particular, Russian companies dealing with software and Internet technology reached the international level of competition.

    According to Siller, Russia no longer needs foreign investment because it already has sufficient fixed capital. The country will rather move further and manufacture its own products, the expert stated, adding that Russia still has great potential "in the field of food production".


    Central Bank: Russian Economy's Dependence on Oil Prices Discreasing
    Russian Lawmakers Urge Legal Reform to Stimulate Economy
    Russian Government Expects Economy Growth in 2016
    crisis, economy, Russia
    Community standardsDiscussion
    Comment via FacebookComment via Sputnik
    • Сomment

    All comments

    • Well you can do nothing against their good mood. Nothing bothers. Russia is an other world itself so the neocons can keep trying in vain!
    • rzuber78
      US$ is a lie and used by USA to parasitize on the whole planet.. if the US would pay its debt, there would be nothing left. they would have to sell everything they own...it would look like before they invaded and destroyed the american civilization and performed holocaust against them...so if something i hold English and Spanish criminals responsible and still living of the riches stolen from Americas....
    • avatar
      The USA is trillions in dept lives on dept the sooner nations pull the plug on the dollar the better.Let it sink into a third world nation with rampant inflation.
    • FlorianGeyer
      Russia has learned quickly to utilise the vast wealth of human ability and resources within Russia. This is a great part due to the Leadership of President Putin who is slowly removing the parasitic influence of Western banks and its zionist little helpers.
      The American Neo-Cons did their best to destroy Iran and failed. The Neo-Cons will fail to destroy Russia that is capable of countering any military adventure the criminals in Washington, London and Tel Aviv have wet dreams about.

      It may well be the American Century in the eyes of the blind in the US. In the real, world however all we see is a broken and deviant US society fractured on the fault lines of race and plundered by the 1%, or to be more accurate the 0.1% and its paid stooges in the 1%.
    • FlorianGeyerin reply tojj42(Show commentHide comment)

      Many of us in the civilised will rejoice on that day. The American people will then be able to rid themselves of the shackles of debt and serfdom to the 0.1% ( or less).
    • Mother Gorilla
      He forgot to mention that a competitive Ruble facilitates exports. With its technology, Russia probably could put Germany and Japan to shame. But it's probably just as good to keep the environment healthy.
    • avatar
      Ivan Zadorozhny
      Hitler found that out to his cost too.
    • avatar
      Russian resilience to the market whims is not because the market has been nice to Russia but contrary, market is still trying all they can to sink Russia. Source of Russian resilience is knowledge that Russian economy is based on the real value of material products and that it does not matter how much western bankers value Rouble as people in Russia are living and earning Rouble and for as long as they do not have any significant inflation they will be happy.

      It would be completely different if Russians would earn Roubles and then have to exchange them to foreign currency in order to buy the food and other necessities. Western economist will never understand how it is possible to live with 5x less money (on exchange rate) and not just to survive but to live good life and have a lots of fun.

      Simply, for example average salary in Switzerland is two times bigger than in Germany but they do not have 2x more than Germans as for example in Germany a coffee costs 1.5 EUR and in Switzerland on a same type of place over 4 EUR. In reality Swiss worker with average salary has less money than German in real terms. Same goes for Russia. All what Russia needs to do is to reduce imports as much as possible and substitute them with domestic products.

      Just to clear one thing. USA have military budget over 600 billion US$ and cannot maintain its military but is cutting corners wherever possible and Russia has just about 65 billion US$ and now stupid and poorly educated western politicians believe that Russian budget will be just enough for catapults and eventually bow and arrows. Reality is strikingly different and they just cannot grasp where is the reason. Russia has the most modern weapons and absolutely the most sophisticated technology. If USA who is lagging behind would have same budget as Russia their army would shrink on a size of Polish army.

      That knowledge that Russian Rouble is based not on paper or as we would call it “fiat currency” but is really hard currency based on produced material value. EUR as well as US$ have nothing of substance in background. Both currencies are fiat which means that their value is result of mutual agreements and issued government and treasury bonds which are effectively not worth the paper they are printed on. However as they imposed hegemony over the rest of the world there is not much chances for small countries than to accept useless toilet paper called either dollar or Euro.

      I find it interesting how people believe in these fiat currencies which are based mainly on achieved services, financial services in particular. That in practical terms means that if I buy 1 trillion USD treasury bonds and sell them further by taking 0.2% than I will make 200 billion US$ of profit and present that in books as my GDP. Now think about daily currency transactions in value of 6 – 7 trillion US$ and if trader takes only 1/1000 than it will make 6 – 7 billion per day. As these transactions never stops we have 365 days and that would make an income of 2.9 trillion per year. Now think about whole trading values across the floor on stock exchange in London and New York and you will be gob smacked. We are speaking about more than 10 trillions of non material earnings in western hemisphere which are mostly of fictive nature executed just for the sake of the figures.

      It is clear that state has to print dollars and euros but there is no material substance for that print out and in order to keep going on they demand from the rest of the world to have only hard currency as then they will have to secure them with fiat currencies if they want to conduct international trade. That system is made to protect USA and now EU as well and the rest of the world is struggling with EU and USA inflation. That is why we have no inflation despite being in recession and having debts bore than the rest of the world together.

      Thanks to hard Rouble Russia will survive all that west is throwing at them. Well done Russia and all the best to Russian people and leadership.
    • avatar
      I've written it before. It's fascinating to read all of the different and differing opinions of the financial situation in Russia.
    • avatar
      teddy jin reply toslimyfox(Show commentHide comment)
      slimyfox, THANKS slimyfox

      for THAT very , very clear explanation.

      i've been reading about fiat currency etc...

      but you are the first - including among the ''famous writers" -- that has explained it in VERY CLEAR terms and examples. !!

      the exact difference between fiat and ''hard'' currency and what they represent and what their 'value" is. and why the fiat is 'make-believe" (even if it is enforced to ''finance" production) - as opposed to REAL currency such as ruble .

      and how 'fiat" masks a bubble 'wealth' that is not matched by REAL products or real wealth --

      while ruble -- is representative of actual material wealth and productivity.

      THANK YOU!
    • Ivan Buckeye
      If only the U.S.S.R. had some foresight as Russia now does. Independence means doing it yourself.
    • avatar
      armorin reply toIvan Buckeye(Show commentHide comment)
      Buckeye American, Hear, hear....
      Russia: well done :)
    • avatar
      The United States uses it's economic, political and military power for the destruction of people and countries not for the improvement of peoples lives, and this makes the United States the enemy of every world citizen. If you believe that your country or you and your family is somehow immune to the multi-level bully attacks of this evil empire you are mistaken. The United States has proven time and again that it will use it's power for no good ends and therefore has not earned the right to be a super power.
    Show new comments (0)