“Either there will be a political transformation, or go back to poverty, which was in the scoop”
What will happen to the ruble exchange rate, oil price and Russia? Interviews financial analyst Stepan Demur
Stock markets continue to fall every day, cheaper oil, a weaker ruble, the coronavirus affects the whole world economy, and Russia is stronger than the other. How long will all of this than Russia will be able to meet the new challenges, there is a light at the end of the tunnel? To these and other questions in an interview Znak.com said financial analyst, trader, expert on the stock markets Stepan Demura.
“The ruble will go lower and lower”
— The ruble continues to weaken. First, it is a long time? And secondly, in your opinion, is a man-made or natural process?
Is a natural process. As I say, the ruble has no bottom. Just the process is not immediately and choppy. This is due to the structure of political power in Russia, because it is not competitive, however, and the economic system. That is, the ruble’s prospects are very bad. And gap arrangements as part of the deal, OPEC+ is not the cause but the reason.
In the foreseeable future we will see 81-82 rubles per dollar, then 85-86. Then we will see that the ruble will gradually strengthen. Then fall again. And these jerks it will go lower and lower.
— We will not go back to the time when the dollar was worth 60 to 62 of the ruble?
— Maybe we’ll touch the level of 65 rubles per dollar. But 55 rubles per dollar we can only see if the denomination.
— How much it will hit the pockets of Russians given the fact that a significant part of no savings? Meanwhile, Putin for many years poses a challenge to the Central Bank — not to accelerate inflation, that’s his fixed idea.
— That inflation, which has Rosstat, the real inflation is irrelevant in principle. The inflation rate calculated by the basket of consumption. It has long been known that there is inflation for the poor, and there is inflation for the rich, because they have completely different consumption basket. In Russia 70-80% are poor, people who have almost nothing can’t afford, except for food, some clothes and pay utility bills. For them, real inflation is 15-20%, and they feel in their own skin.
Therefore, the weakening of the ruble will have at least a double blow. First. We the importing country. We have five rubles of domestic demand four rubles is imported. In this sense, the rise in prices is inevitable. Second. The government we have a very “wise”, it loves to raise taxes. Because of oil they have now a big problem, the “oil number two” for him was the people. So it will be growing: prices for housing and communal services, taxes, fees, fines, rates and everything else. Moreover, the real incomes will fall further because of the salary one is going to increase, including the public sector.
Zamir Usmanov/Global Look Press
— And how to keep savings, if any?
— Put in the Bank. But it needs to be aluminum or glass. And put need money, not rubles. Therefore, we do not have such a hype about toilet paper in the West. We have it always in their wallets.
“Now Russia will be punished on all fronts”
— Saudi Arabia will increase production by a million barrels a day. Than Russia will be able to respond to the strategy of the Arabs in this price war?
— This war began the Kremlin. Whether it is the spring affected, whether the star somehow got up. They decided to take revenge on the American “kancevica” because they practically buried the “Nord stream — 2” and that displace Gazprom from the European market. And this one does not hide, it is absolutely official information.
So they started it and immediately got back. If a person with the head all right, he does not get one grenade against the four “Tigers”. And our reached. Well, times got, get. Now Russia will be punished on all fronts, and not only the Saudis have, and the Arab Emirates joined. They began to target oil market of Europe, now they are doing offer customers to sell oil at $ 25 per barrel. They have the cheapest oil. They can afford it. All this talk about the fact that they have a budget drawn up on the basis of $ 70-80 per barrel, just propaganda talk. Budget as typeset? There is a price and volume which is sold at the price budgeted. Suppose, for instance, the Saudis will have to produce and sell oil at 15-20% more? The same money they budget and gather. They have foreign exchange reserves — $ 500 billion, the public debt — 30. Aramco the company is generally not burdened with any debts.
Let’s look at Russia. Foreign exchange reserves — $ 500 billion. The national debt — somewhere around $ 400 billion, given the fact that the debts of our private corporations, as practice shows, are public. Our “Rosneft” is just overloaded with debt. And the cost of oil at us why-that is very high. Therefore, we will not be able long at these oil prices. All of these statements about the fact that we last 5-10 years, just the stories that are without Foundation. You will see what happens in 2014-2015, we had several funds, and all of them lasted for six years.
We will have to be pressed down, as the balance of supply and demand will soon need to bring in a compliance with the storage capacities that are still not filled. And with such volumes of production, apparently, according to various estimates, even the entire tanker fleet will be scored for storage and a half-two months. So, you will need to remove the canopy offers. And how to do it? Quite a few phone calls around the world: “Guys, they’re under sanctions, is better to them not to work. Buy oil from the Saudis”. And all — no money.
What can we say? As usual, a menacing frown, to inflate the cheeks, aggressively snapping rolls.
Igor Sechin and Vladimir ПутинKremlin.ru
— Maybe the Kremlin is not simply “pohrustet rolls”, and answer some interference in the politics of the middle East, as it does for example with Syria?
— The “massacre of the innocents”, which recently staged the Turks in Syria, showed that we have no power to accomplish ventures that we’re at. Is possible somewhere to get, but in any serious collision we will lose everything, including aviation and air defense. The Turks repeated what the Americans did in conjunction with the Israelis in 1982 with the Soviet air defenses in the Lebanese Bekaa valley.
— That is the end of Russia as oil and gas powers, about which so long spoke?
It’s not so much the end. Or simply be some kind of transformation, especially in politics, or we’ll return to that poverty, which was scoop. The same “Rosneft”, which cooperated with Venezuela, as I said, can very easily fall under the sanctions. And from 3-4 million barrels per day can leave the market. And all will be well — the prices will soar. As for Rosneft, sorry… the Rescue of drowning — the handiwork of drowning.
— How do you see the prospects of various oil and gas projects of Russia in the light of what is happening?
— Exploration killed. In recent years all the money sent to her was stolen. Today, our oil industry still lives through the old Soviet fields. At prices of 50 dollars per barrel we have an easily extractable oil was only 30%. The lower the price, the extract oil is becoming heavier and heavier. So we do have large reserves of oil, but to get them unprofitable. Their technology of oil production there. All the Western technology. So, if the West wants, will do everything that we ceased to produce oil. So we rate our oil prospects.
Take the “Nord stream — 2”. Now goes to finish the pipe-laying vessel “Akademik Chersky”. The ship is not equipped for such pipes. He was laying pipe of smaller diameter. Well, our craftsmen will be able something to podarit. Here he comes down there, spent a lot of money, and it is ready to lay the pipe. But there are Americans on this ship, impose sanctions and all. And no insurance company will insure him, and the Danes without insurance will not allow him to work. Therefore, the only ship that theoretically might have something to do, in fact absolutely useless. Therefore, the “Nord stream — 2” can be buried.
As for Rosneft, it is enough to impose penalties cooperation with Venezuela, and no one will buy in “Rosneft”. This oil will leave the market and prices will recover. What the West don’t know. The reason has already been given, trump has already said: that is happening in the market, blame the Russians and coronavirus. But it is worth it to start the process, and the Russian oil industry floats belly up.
— If everything is as you say, then why did the government of Russia and Rosneft? They are not able to foresee, what will happen? Or they do it consciously, but then — for what purpose?
— Fools! There is the rule of Occam’s razor. If you have something you can explain, without attracting additional hypotheses, then it is true. I have other versions to explain what happened there. For me it’s all a manifestation of incompetence and inadequacy. Conspiracy theory here I do not see any, everything is on the surface, screwed, nothing.
I hold the view that no political, no economic leadership of the country, no tactics, no strategy. All decisions are situational. And it’s a reaction to changing external conditions. Therefore, in order to discuss their actions, specialized psychiatric, substance abuse education.
Here’s another example of their incompetence. What do civilized countries, when the economy crisis starts? They cut taxes, reduce the key rate and flooded the economy with liquidity. What do these “geniuses of geopolitics”? They raise the rate, increase taxes, remove liquidity from the economy. You still need to evidence that they are inadequate?
“The sooner this falls apart, the more chances to build something new”
— What are the prospects of the Russian banking system in the light of the outbreak of difficulties?
Our banking sector is bankrupt. Banks fall, when they begin a banking gap. But first they must become bankrupt. Assets plus equity must be less than the liabilities. The way it is. They can draw anything. But according to the same Agency, S & P, the share of bad loans from Russian banks for 25% of the portfolio. I agree with this, perhaps the proportion is even 25-30%. If now gone recharge petrodollars, all — the banking industry collapses. And what will our government do in response? To print rubles, and accelerate inflation and weaken the ruble. It is a vicious circle.
Lee Jae-Won/AFLO/GLobal Look Press
— At the end of last year, analysts predicted the beginning of global crisis in 2020. What is happening, this is the beginning of the global financial crisis or is it just until the crisis is for Russia?
— The global economic crisis means that the economy is starting to decline. Today, industrial production is declining in the United States and in Europe. This crisis has matured. He did not begin this year. And it is inevitable. The problem is that since the crisis of 2008-2009 no structural changes in the global economy. On the contrary, all the imbalances that were, to date, has only worsened due to the policy of Central banks. And they have one policy: the bucks overcome the evil. Today pouted like this megaputer, which did not know the story. It’s time for him to burst. Look at China. It was an example of, excuse me, moronic kansanshi model. They are constantly last 10 years, survived by debt inflating the economy. And now — the game is over.
— What to expect small and medium businesses? Again raising taxes?
— Small businesses have long had to buy a sheet and crawl to the cemetery. Consumer demand is declining, real incomes are declining, taxes are increasing. Now the business can’t work and pay taxes honestly. One or the other. And that means — in any way. There are a lot of different services, like sanitation and fire, which it is necessary to unfasten to you from behind. In my understanding, today a small business thrill seekers or suicide bombers.
— What are you offering them? To sell everything and go to work employees?
— Now, even not to sell. Or only for a penny. I have five or six years ago in interviews and programs were advised to sell all your small business, it only gets worse. And here it came.
— What is your perspective on the panic associated with coronavirus?
— Bekhterev well described similar phenomena, read it and you will understand what the mass hysteria. If you look, there were only two sane world leader in this situation. Is Boris Johnson and Donald trump. Trump said, “what’s the panic, the deaths from coronavirus, a smaller percentage”. Johnson said roughly the same thing: “Guys, we will not do anything, prepare for the fact that some of your relatives gone before.” Normal flu, and fanned clear that (note Znak.com. The who cites several important differences COVID-19 and the normal flu).
As for the impact on the economy is not to be confused with the flu and a mass psychosis. The global elite has degenerated, according to Pitirim Sorokin. What we are now witnessing is the result of degeneration of the elite. I don’t even know where it is now more hysteria among the population, or the so-called elites.
Is who, who is known for his Scam with swine flu. And now the organization gives recommendations how to behave during a pandemic. For example, who writes that the mortality from this Chinese flu almost 4%. (Note Znak.com. On the who website said: “the True mortality rate is currently determined accurately, however, according to available information, the mortality — that is, the number of deaths related to reported cases of the disease, — varies from 3-4%, and the proportion of deaths from infection — the number of deaths related to the number of persons with infectious diseases — below”.)
But I think that’s propaganda. If you look at the deaths from the coronavirus in different provinces of China, where it is very different. For example, in Hubei province, which has become the epicenter of the virus, the death rate really is above 4%. But if you look at the rest of the province where there was a special quarantine, the mortality below one percent. The explanation is simple. When the epidemic has evolved, began to be tested. Consequently, sharply increased the rate of detection of infected, respectively, and the percentage of deaths to the number of cases suddenly came to a level, which is not very much higher than the normal seasonal flu. Further, it is now recognized that testing if it does not include testing of blood, has the effect of 30 to 50%. Accordingly, the real mortality from this “scary” pandemics is almost compared to mortality from the flu. Nevertheless, the who argues that the mortality rate of 4%. Even bill gates is actively pedaliruet this topic: and let the 10 days to do the whole industry stop.
— How that happens can be explained from the point of view of the economy?
The coronavirus is the reason. Whom it is profitable? For instance, bankers, it’s very good. They may try to cancel and re-socialize the costs. They have privatized income and are engaged in socializing the costs. Management of large companies is also good. They gained huge debts to buy back their own shares and get good bonuses. And now they have no capital to cover the operations of the company as a result, even such minor economic shocks. Interested much to use this theme and cover their tracks.
— Something good in everything what is happening today is? Perhaps, for Russia this is a chance from the point of view of modernization?
— It depends on the people. But I have no real large-scale change requests do not see. The people of the Bay in the kitchen and in social networks, but this is not a request for changes. We have a standard situation that happened in history hundreds of times — when the relations of production do not correspond to the development of the productive forces. Either change the relations of production, including the political system, and then everything goes back to normal. Or territory ceases to exist as a single entity. On the other hand, we have a saying: before you get in — get out early. The sooner this falls apart, the more chances to build something new.
— You could offer to change the situation?
— If I start to offer, you can get under article of the criminal code, so it’s best to remain silent.
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