2y ago

Russia got richer even as the war in Ukraine raged on last year, while the West shed trillions of dollars of wealth

www.businessinsider.com Russia got richer even as the war in Ukraine raged on last year, while the West shed trillions of dollars of wealth

UBS's annual wealth report showed Russia added $600 billion of wealth in 2022, with the number of millionaires rising by around 56,000.

World News @lemmygrad.ml

www.businessinsider.com /war-in-ukraine-russia-richer-millionaires-billionaires-uhnw-wealth-ubs-2023-8

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World News @lemmy.ml

Russia got richer even as the war in Ukraine raged on last year, while the West shed trillions of dollars of wealth

www.businessinsider.com /war-in-ukraine-russia-richer-millionaires-billionaires-uhnw-wealth-ubs-2023-8

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What does the lower exchange between the ruble and the dollar mean then? The ruble is worth less dollars than before.
UBS (a Swiss bank) doesn't really have reason to lie about the wealth increase. Is the exchange rate thing just because rubles are less useful internationally because sanctions?
The US has inflation, and if the ruble is worth less dollars then that means Russia has even more inflation.
Obviously all our media wants to paint a picture of Russia doing terribly, but I wonder what the actual picture is. All the companies that left Russia left behind all their shit for Russia to use which if anything helps them keep more production in their own borders.
- Lower rouble means that Russian exports are cheaper and more attractive allowing government get more money domestically after conversion thus helping balance the budget. It also means that imports are higher of course, but seems that exports are what's relevant for state budget in Russia. Deficit in Russia is only around 2% of the GDP, compare that to the astronomical deficit US is running.
  Also worth noting that rouble value against the dollar doesn't have much practical meaning given that there's very little direct trade between Russia and the west.
  
  The American deficit is less than 5% of GDP, so it's larger relative to the economy but not exactly what I'd called astronomically higher.
  
  5.3% already now while continuing to grow:
  In the agency’s projections, deficits generally increase over the coming years; the shortfall in 2033 is $2.7 trillion. The deficit amounts to 5.3 percent of gross domestic product (GDP) in 2023, swells to 6.1 percent of GDP in 2024 and 2025, and then declines in the two years that follow. After 2027, deficits increase again, reaching 6.9 percent of GDP in 2033—a level exceeded only five times since 1946
  
  5.3% is very much still in line as a fairly ordinary deficit compared to many other countries in the world. A little towards the higher end, but not out of the ordinary by any means. The 2027 projection is a fair cause for concern, but the point of this report is explicitly to make sure the American budget doesn't head that way. To quote:
  "CBO’s baseline budget projections are meant to provide a benchmark that policymakers can use to assess the potential effects of changes in policy; they are not intended to provide a forecast of future budgetary outcomes."
  
  Thing is though is that US has been able to run a large deficit because the dollar is the reserve currency. Since, until recently, countries had no choice but to use SWIFT for global trade and energy was traded exclusively in dollars, that meant countries had to buy dollars in order to trade them for these resources. Dollar based economy is rapidly shrinking now because US in its infinite wisdom decided to cut one of the biggest commodity producers out of it. So, now we're seeing more and more bilateral trade happening where countries use their own currencies. This process is developing much more rapidly than anybody expected, and what that means is that the value of the dollar is shrinking.

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