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What Should The Response Be?
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<blockquote data-quote="Caustic Burno" data-source="post: 1587290" data-attributes="member: 694"><p>As the Baptist say we will agree to disagree.</p><p>Investopedia</p><p>"The price of oil and Russia's economy have the opposite relationship. When oil prices drop, Russia suffers greatly. Oil and gas are responsible for more than 60% of Russia's exports and provide more than 30% of the country's gross domestic product (GDP). The effect of the 2014 oil price collapse on Russia's economy was fast and devastating. Between June and December 2014, the Russian ruble declined in value by 59% relative to the U.S. dollar. At the beginning of 2015, Russia, along with neighboring Ukraine, had the lowest purchasing power parity (PPP) relative to the U.S. of any country in the world. Declining PPP lowers living standards, as goods purchased using the home currency become more expensive than they should be. Moreover, Russia receives less economic benefit from lower pump prices than the U.S. does, as Russians consume much less oil and gas than Americans. Less than 30% of Russia's oil production is retained for domestic use, while the remainder is exported.</p><p></p><p>Oil prices also affect imports for Russia, as was seen in 2014. Because the country is a net importer of goods like soybeans and rubber, the sharp increase in import prices caused by a falling ruble touched off major inflation, which the Russian government attempted to tamp down by raising interest rates as high as 17%. As the U.S. discovered in the early 1980s, a sudden and significant interest rate hike can precipitate a deep recession.</p><p></p><p>Fending off dual threats of sharp economic contraction and rampant inflation is a tenuous proposition for policymakers in any nation; for Russia, it is an unfortunate reality when oil prices decline."</p></blockquote><p></p>
[QUOTE="Caustic Burno, post: 1587290, member: 694"] As the Baptist say we will agree to disagree. Investopedia “The price of oil and Russia's economy have the opposite relationship. When oil prices drop, Russia suffers greatly. Oil and gas are responsible for more than 60% of Russia's exports and provide more than 30% of the country's gross domestic product (GDP). The effect of the 2014 oil price collapse on Russia's economy was fast and devastating. Between June and December 2014, the Russian ruble declined in value by 59% relative to the U.S. dollar. At the beginning of 2015, Russia, along with neighboring Ukraine, had the lowest purchasing power parity (PPP) relative to the U.S. of any country in the world. Declining PPP lowers living standards, as goods purchased using the home currency become more expensive than they should be. Moreover, Russia receives less economic benefit from lower pump prices than the U.S. does, as Russians consume much less oil and gas than Americans. Less than 30% of Russia's oil production is retained for domestic use, while the remainder is exported. Oil prices also affect imports for Russia, as was seen in 2014. Because the country is a net importer of goods like soybeans and rubber, the sharp increase in import prices caused by a falling ruble touched off major inflation, which the Russian government attempted to tamp down by raising interest rates as high as 17%. As the U.S. discovered in the early 1980s, a sudden and significant interest rate hike can precipitate a deep recession. Fending off dual threats of sharp economic contraction and rampant inflation is a tenuous proposition for policymakers in any nation; for Russia, it is an unfortunate reality when oil prices decline.“ [/QUOTE]
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