Publication in Russian on the Zen blog
https://dzen.ru/a/Zs8OuY-K6mCfW6Oj

The Russian economy is growing rapidly - some propaganda media claim. The Russian economy is actually overheated with stable demand, unlike the West, which is "playing with recession" and "increasing unemployment". I would like to repeat the facts based on evidence about the Russian economy, interest rates, the ruble, prices, countries and labor shortages.

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Hello, in this publication we will talk about the Russian economy and the latest news. The reason for this publication is the news, statements, reports from some media, including well-known and large ones, not only Russian, about the growth of the Russian economy. I will prove that this is based only on opinions, and not on solid economic facts. The media say that the Russian economy is flourishing, and Western economies are not coping. The headlines of seemingly respected publications look quite clickable, presenting seemingly irrefutable arguments in favor of the fact that the economy in Russia is growing at the level of GDP and the country has a low unemployment rate, albeit with a little inflation, but this is due to the fact that the economy as a whole is developing well. It would seem that the media are respected with clickable arguments-headlines, but the articles themselves about the growth of the Russian economy and the decline of the Western economy are subject to enormous criticism up and down and on all points. It seems a bit strange when the media claims that there is no unemployment in Russia and that there is unemployment in the West. America, Canada and European economies are often mentioned. The media uses the term "flirting with recession". Let's dive into this data and see how the facts speak for themselves. I try to stick to the facts and if I make a claim, I like to back it up with a fact. The unemployment rate in the US is 4.3%. This does not seem like a sharp increase in unemployment. In fact, it suggests that the unemployment rate is pretty close to normal. There is structural unemployment, frictional unemployment and cyclical unemployment. Structural unemployment is associated with some kind of large-scale change, such as the transition from an industrial to a post-industrial economy. During such transitions, there will be some natural level of unemployment. Frictional unemployment means that, let's say, my wife is a lawyer or a doctor and she gets a job in Moscow, and I leave my construction job and for some time I will have to look for a new job on a construction site in Moscow. So this kind of unemployment is excluded from the general unemployment situation, and this brings us to cyclical unemployment. At the moment in the US, cyclical unemployment is zero. What is the natural rate of unemployment - you can read about this term in the books of Milton Friedman. Do you believe what the media claims in their publications about economic growth in Russia and the problems associated with unemployment in the United States? You can clearly see that this is not true. Take Poland for example, where the GDP growth is 5.3% and every time they use the term "Europe is flirting with recession", you need to go deeper and look at the numbers. Maybe in Western Europe for some reason there are economies that do not show such confident growth, and this is the topic of other publications, but from the example of Poland, the economy is showing phenomenal growth, that according to some economists it will overtake the UK in terms of living standards, this is a pretty bold statement, but who knows. So, the first component of the media claim is that the West is not keeping up with the Russian economy. I believe that each of you can refute such an obvious lie on your own. Let's look at what is happening in Russia. According to data from Russian sources, the Russian economy is growing, uh... jumping, leaping, breaking all boundaries, the Russian economy is on top of the mountain. But if we look at other aggregate data from statistical sites, we can say that the average disposable income in Russia for the average Russian after taxes is $571, which is down from two months ago, when it was $597. It's $571 now, and if you compare that with inflation, and there's massive inflation in Russia, if you talk to Russian people who still have access to free information, and you look at any other objective indicator, like the Central Bank of Russia reporting inflation and raising the interest rate from 16% to 18%, that leads to the true disposable income, which is after you calculate the expenses for the average Russian, where $514 is the cost of living a simple Spartan village life. So the remaining $50 or so is the real disposable income. $50 a month for the average Russian. And for pensioners, this figure is 20 dollars a month. This is an average value, which is distorted by very high inflated salaries in Moscow and also in St. Petersburg. I once talked to a man from Europe, he was a poor man, he was in a Catholic religious order several years ago, and he said that he received 50 dollars a month for expenses, having taken a vow of poverty, and at that time it was complete poverty, with this money he bought a book or something like that. Now look at the average disposable income in Russia. Pay attention to the simple and essential facts about the average Russian. Here's the thing. Now the most interesting thing is that the Russian ruble is falling. Some say that in a few days the economy has grown by about 12 kopecks. But in fact, it has fallen by 10% in the last five days alone, which shows that it is not as strong as they say, and it is also an artificial anchor for the ruble, which is collapsing and will collapse. Some people claim that sanctions do not work well. You know, sanctions do not work instantly. It is like a mixture of something, like a protein shake, it takes some time, usually with a delay of several quarters. And if the value of the ruble is artificially pegged to the dollar, what is the true value of the ruble and the disposable income of the average Russian? Let's say it is $14, it could be $1, it could be $2, if we express it in the actual value of the ruble on the free market, it could be a kopeck, I believe that the ruble in today's Russia has a negative value. Where does this value come from? It comes from the idea that in Russia people are treated like cattle, and in Moscow's opinion, this is an efficient economy. There is an economic fact that no economist in the world can refute. The most efficient economy in terms of production and efficiency or free markets, when you take away the free market aspect, whether it is in China or in Russia, and people turn into cattle. Productivity and allocative efficiency turn negative. That is one of the problems that Russia faces. The other problem is the labor shortage. The labor shortage is made worse by the fact that foreign workers can no longer be brought to Russia. There is no transparency in Russia, there is no free media, YouTube is closed, few people know what is going on. You can drink potato water and sit staring at the wall, hoping that one of your neighbors will tell you what is going on. The Russian economy is booming, but the rest of the world knows that if you go to Russia to be a worker and get a Russian salary, which is supposedly better than Africa or India, then in reality you are not going to Russia to work in a factory and send money home. You can go to Russia just to go to the front, without expecting to return home. Or Russia can only attract cheap labor. Because there are no people and no labor migrants willing to go to Russia. Even according to official statistics, the population loss in Russia is very high. The government is trying to attract more people to Russia, but there is still a huge deficit that is only just gaining momentum in Russia and which is the cause of inflation due to the lack of demand and huge supply. So every aspect of the media headlines about the Russian economy growing rapidly and the West starting to stumble is wrong. I respect economists who take very seriously objectivity and the statistics that support their claims when they look at them from a microeconomic point of view, not from an aggregate macroeconomic point of view in order to project a political agenda. There is a massive labor shortage in the Russian economy, but it is not just a labor shortage, it is actually a massive redistribution and misallocation of productive resources. A shortage of the most productive resource in the world, the human brain, and this shortage is just beginning to manifest itself in Russia. The end result at the moment is a Central Bank that, even after raising the rate by 18%, cannot keep the situation afloat significantly, and as the ruble falls, although this may take some time, the whole system collapses. In the next few months, the Russian economy will be in jeopardy. They say that Russia is big and strong, no, it is not. Russia is a country with an unfree economy. The ruble is paper. People are fleeing. Workers do not want to immigrate. There is no one to grow potatoes, no one to sew clothes, sanctions are coming into force, Russia has real economic problems. And about the West, many would say that America is stagnating and is about to fall apart. We heard this in the 70s, we heard it in the 60s, 70s, 80s, 90s, 00s. And every time I hear it, I am amazed and scratch my head because the average family income in America is thousands of dollars a year, you can just throw money around and live a pretty decent life surfing on the beach or going to amusement parks in Orlando, and I wonder if there is any economic basis for people and the media to believe that America is going to collapse and Russia is experiencing rapid economic growth? People who say that need to be careful in their predictions because economists are terrible forecasters. I know I just predicted the collapse of the Russian economy, but there is reasonable evidence for that, and I say this cautiously because this publication on the pulse of the Russian economy is partly to counter the propaganda media's claims that the Russian economy is rapidly growing. The Russian economy is rapidly developing, and the West is in decline - I would advise drawing opposite conclusions from such headlines, because it will be closer to the truth about the Russian economy and the Western economy. The headlines of such publications speak about the quality of such media and I am sure that we will soon see the results.

Милтон Фридман - американский экономист, статистик, преподаватель университета, эссеист, создатель теории монетаризма, нобелевский лауреат.

For the first time I saw an economy growing rapidly at an interest rate of 18%.

Government spending is growing rapidly. Everything else is down. Yes, government spending on unproductive endeavors is growing in Russia. It doesn't look like a boom at all.

When I think of the fall of the Berlin Wall, I wonder if Western countries really had any reason to worry during the Cold War. I feel sorry for Russia and its people... especially outside the big cities. If it weren't for TV, you'd think it was 1924 instead of 2024...

If you have $1 million in savings and spend $1,000 a day, you'll have a pretty good life for about three years, going out to eat, having fun, etc. But what will you do when the money runs out and you can't get a loan for your business because the interest rate is 18% and there are no high-paying jobs for you?

How can the economy grow rapidly if it spends a lot of money on war and exports are falling? Some propaganda outlets claim that Russia is spending its National Wealth Fund to create a prosperous economy and that it will not run out for another five years. If it is true that Russia's pockets are that deep, perhaps it will be able to continue to feel no negative effects from the war. But most other sources I have read say that the National Wealth will run out in one or two years. So the truth is that Russia is not spending money on anything except Ukraine and some petty "bread and circuses".

The headlines published by Russian propaganda outlets are enough to confuse any financial mind. Even without being an economist, if you have a sound mind, you can understand that artificial currency and a fake economy are not an economy. What is even more remarkable is the level of illiteracy among ordinary people who read such nonsense and believe it because the source is a "respectable" magazine! In reality, such authors are not economists, but just bloggers in search of material, trying to write serious articles for the benefit of the party and personal gain.

Has Russia ever had an economy? Apart from natural resources, weapons and vodka, has Russia exported anything else? No economy, people live like a developing nation with corruption and little freedom and running water.

Given that Russia is now effectively a war economy, I am sure that the econometric generative AI of the US military industrial complex on the world's largest supercomputer, 50 times more powerful than anything Russia has, would interpret the situation as extremely unfavorable overall, e.g. Russia suffers from constant massive material losses of 3:1, Russian oil depots are severely depleted, Russia is literally begging North Korea for help, the Black Sea fleet is completely retreating from Crimea after being destroyed, Putin's sign of increasing bonuses recently massively indicates difficulties in recruiting, Ukraine's actions lead to restrictions on fuel exports to Russia, interest rates have jumped to 20% All this indicates that Russia's war economy potential is on the brink... Is there really no economy in Russia other than to go after Ukraine?

Since Russia is the largest country on Earth, significant government spending is required to govern, protect, and maintain all of that territory. The government has to take care of the vast infrastructure, seaports, pipelines, railways, highways and roads, and public services. Then, considering the huge military expenditures and all the government salaries, the bottom line is that all this money is just a big waste that actually does little to improve living standards. The cost of living goes up significantly, but wages remain stagnant in most cases. In essence, Russia is seen as a Potemkin village, the proverbial house of cards. There is a lot of smoke and mirrors here. The reality is that vast millions of Russians are relatively poor and starving. Nothing will change this terrible problem anytime soon, if ever. The world's financial institutions see Russia as a high-yield investment. The Russians are poor. Creating an economy in which people prosper through productivity and efficient distribution has proven to be an impossible task, harder than the current Tsar of Russia thought. Good luck to all, political and economic literacy.

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Publication in Russian on the Zen blog
https://dzen.ru/a/Zs8OuY-K6mCfW6Oj