Litwin
Platinum Member
Great news ! "Russian" empire is the world’s biggest loser from oil’s crash. With cost of “black gold” at 15-23 dollars per barrel, the USSR economy collapsed, and the sovok itself collapsed, and the "golden" horde ("russia") budget can only be fulfilled only with oil price at $ 42.4 and higher.
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Soviet Union fell for many reasons — inefficiency and corruption had been mainstays of the system for decades — but things changed in the 1980s. For one, defense budgets soared as Moscow tried to keep pace with U.S. military development, particularly the legendary Star Wars project, as much legend as a project. For another, the price of energy fell, and the Russians were heavily dependent on energy sales. Russia was caught in a vise between defense spending and falling energy prices, and this ultimately undermined the basis of the Soviet Union.
After the fall of the Soviet Union in 1991, Russia faced the old challenge of building a modern economy rather than a Potemkin village of modernity. The first decade after the fall was chaotic as investment bankers and oligarchs appropriated the wealth under the banner of privatization. The emergence of Vladimir Putin, the former KGB agent who was tied into the oligarchy, should have led to a surge of modernization. Energy prices were reasonably high, and investment capital for a modern economy could, in theory, have been created.
Russia’s challenge is not building a new generation of hypersonic missiles, nor investing in advanced technologies. Russia’s challenge now is to avoid collapse. The Russian budget is distributed among its constituent regions, which pay the teachers and doctors and firemen.
But with the decline of energy prices, Russia’s budget declines, and as it declines, the regions contract. Russia, a Third World country, has few counters to low energy prices.
" Russia is the world’s biggest loser from oil’s crash, and that’s reason to worry
"
Soviet Union fell for many reasons — inefficiency and corruption had been mainstays of the system for decades — but things changed in the 1980s. For one, defense budgets soared as Moscow tried to keep pace with U.S. military development, particularly the legendary Star Wars project, as much legend as a project. For another, the price of energy fell, and the Russians were heavily dependent on energy sales. Russia was caught in a vise between defense spending and falling energy prices, and this ultimately undermined the basis of the Soviet Union.
After the fall of the Soviet Union in 1991, Russia faced the old challenge of building a modern economy rather than a Potemkin village of modernity. The first decade after the fall was chaotic as investment bankers and oligarchs appropriated the wealth under the banner of privatization. The emergence of Vladimir Putin, the former KGB agent who was tied into the oligarchy, should have led to a surge of modernization. Energy prices were reasonably high, and investment capital for a modern economy could, in theory, have been created.
Russia’s challenge is not building a new generation of hypersonic missiles, nor investing in advanced technologies. Russia’s challenge now is to avoid collapse. The Russian budget is distributed among its constituent regions, which pay the teachers and doctors and firemen.
But with the decline of energy prices, Russia’s budget declines, and as it declines, the regions contract. Russia, a Third World country, has few counters to low energy prices.
" Russia is the world’s biggest loser from oil’s crash, and that’s reason to worry
