Thursday, November 16, 2017

Russia's economy(two trillion dollars) is just 1/8th the size of America's(17 trillion), and 1/16th that of the West (USA and EU combined).. Russia is so poor and America so rich that it will be totally SHAMEFUL If we let Russia launch a punishing nuclear attack against us, with Russia then ESCAPING our retaliatory strike !!! Russia destroys us, but we don't get to destroy Russia !! (By definition, nuclear war is supposed to be M.A.D., "M U T U A L A S S U R E D D E S T R U C T I O N.")

Russia's economy(two trillion dollars)
is just 1/8th the size of America's(17 trillion),
and 1/16th that of the West (USA and EU combined)..                          
Russia is so poor and America so rich that it will be totally SHAMEFUL                  
If we let Russia launch a punishing nuclear attack against us,                          
with Russia then ESCAPING our retaliatory strike !!!                      
Russia destroys us, but we don't get to destroy Russia !!                    
(By definition, nuclear war is supposed to be M.A.D.,                    
"M U T U A L    A S S U R E D    D E S T R U C T I O N.")                        
How can it be possible that dirt-poor Russia will beat RICH America?                          
How can Russian interceptor missiles (ABMs) shoot down                          
all our retaliatory missile warheads?                          
Answer: It's because we have drastically REDUCED the number                          
of our submarine-launched ballistic missile warheads.                          
By our reducing our retaliatory arsenal down to where the warheads we have                    
are equal in number to the number that Russia could shoot down,                      
we have made it easy for Russia to shoot down our retaliation.                          
In short, we have been unwilling to spend the money needed                          
to produce an adequate retaliatory arsenal.                          
The reason Russia will bomb America with impunity is this:                          
we have let Russia trick us into signing disarmament agreements.                          
that have left us nuclearly naked, stark naked nuclear-wise.                          
With all the money we,the USA and the EU, have                          
(a 32 trillion dollar economy versus Russia's 2 trillion dollar economy),                        
we should have built a retaliatory arsenal capable of                          
destroying every inch of Russia,                  
Striking total fear into Russia,                  
Thus deterring Russian Attack.                  
Actually we DID have a robust retaliatory arsenal                          
but then Russia ended the Cold War.                        
That's when we started cutting back and we've steadily cut                          
more and more over the last 27 years.                    
Yes, not only will nuclear war be super-destructive,                    
It will be so SHAMEFUL that Russia with a pigmy-size economy                    
WHIPS America, the number one economy in the whole world.                    
How embarrassing !!!              
PS: I think Nostradamus wrote of a "27 year war"    
concerning "Mabus," an anagram for Sadam.    
If you turn the "b" around, making it a "d," it works.              
In turn Sadam may be a figure for Gorbachev.              
For he has waged 27 years of a false peace, psychological war            
designed to get our pants down, nuclear arsenal-wise.              
I mean the Kremlin has been trying to get our arsenal down around our ankles          
like a teenage boy trying to get a girl's panties down.              
Next comes the rising missiles similar in shape    
to what gets "whipped out" for the purpose of penetrating,    
and thrusting, thrusting, thrusting and conquering.      
If Nostradamus is talking about Gorbachev veiled as Sadam,        
Then even he,the Catholic seer, knew, way back in the 1600s,      
when, just when, Gorbachev would press the nuclear button,        
Namely, "27 years" after ending the Cold War beginning in 1989 (1989-1991).        
Namely 2016 !!!        

Thursday, September 7, 2017

When Russia and China come up as subjects in the media and in political and academic discourse (as they frequently do), they are discussed in terms of bilateral relations, as a segue into a discussion of regional and global politics, as authoritarian threats to the West, or as examples of attempts at authoritarian modernization.

When Russia and China come up as subjects in the media and in political and academic discourse (as they frequently do), they are discussed in terms of bilateral relations, as a segue into a discussion of regional and global politics, as authoritarian threats to the West, or as examples of attempts at authoritarian modernization. Ever since Bobo Lo and I endeavored to compare Russia’s and China’s roads to modernization (see “A 21st Century Myth: Authoritarian Modernization in Russia and China”), I cannot help feeling that a comparison of these two civilizations and their centralized states, as they both look for an appropriate response to the Western democracies, would reveal not only the dramas of undemocratic societies and an understanding of the limitations of modernization efforts by top-down governments, but also the challenges that the West faces—challenges that it is, to date, incapable of assessing correctly.

Shevtsova chaired the Russian Domestic Politics and Political Institutions Program at the Carnegie Moscow Center, dividing her time between Carnegie’s offices in Washington, DC, and Moscow. She had been with Carnegie since 1995.
Lilia Shevtsova
Senior Associate
Russian Domestic Politics and Political Institutions Program
Moscow Center

More from this author...
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Putin Has Fought His Way Into a Corner
Putin Ends the Interregnum
Blurred Lines Between War and Peace
Observing the authoritarian experiments of these two serious global actors (although one of them has been weakened), as well as their search for an appropriate international role, has made for interesting viewing, revealing several paradoxes: first, the paradox of stability covering up a deeper instability and impending upheavals; second, the paradox of economic growth that is most likely only a brief respite before a precipitous fall; third, the paradox of outward displays of force that conceal inner weakness and disorientation. These paradoxes illustrate that there is a conflict between perceptions and reality in these two authoritarian states. The only question is to what extent they are the results of conscious distortions of reality as opposed to naivety or unwillingness to accept inconvenient truths.

Were Arnold Toynbee alive today, a comparison of Russia and China would provide him with ample material for his theories on the rise and fall of civilizations. Perhaps, Samuel Huntington would have revised some of his conclusions on reform from the top and the role of the middle class in modernization. I hope, too, that Francis Fukuyama will have a chance to compare the modern evolutions of Russia and China, and their systems’ struggles for survival, in the upcoming second volume of The Origins of Political Order.

The West should be particularly concerned about the future of these two models of the centralized state. The impact that Russia and China have on global security and the world economy is not the only cause for concern. More importantly, both authoritarian systems have found a way to exploit liberal democracy, and both have been quite successful at doing this. Since the fall of Communism, Russia’s personalized regime has been able to use the West as an important guarantor of its stability. It has also been sponging off liberal democracies, in the form of its elite’s personal integration into Western society. This integration has led to the creation of powerful pro-Kremlin lobbying structures that are undermining the normative foundation of liberal democracy (in fact, the Western politicians often don’t even recognize that this is what is happening). It is unclear how the Putin regime will survive, now that it has embarked on the path of consolidating itself by rejecting the West and treating it as an enemy

Saturday, August 19, 2017

US vs. China Russia Together Who Wins?? #operationNEWWORLDORDER #newworldorder #NWO Reviewing the how the U.s. whooped the Chinese, Russians , nd north Koreans during the Korean War , we use that as a preview as to how we plaN to Conquer Moscow AND BEJING , our New World Order End Game Achieveabe= Yes We Can, our one Word U.s. dollar is not lost, This World mission is still achievable. If We stand Defiant, we defeat these Communists! USA! Consider game set, match won..

 US vs. China Russia Together Who Wins?? #operationNEWWORLDORDER #newworldorder #NWO Reviewing the how the U.s. whooped the Chinese, Russians , nd north Koreans during the Korean War , we use that as a preview as to how we plaN to Conquer Moscow AND BEJING , our New World Order End Game Achieveabe= Yes We Can, our one Wolrd U.s. dollar . misson achievable, game set, match won..

You want to be objective? . . . lol . . . Don't make me laugh. Most of, You are full of shit, and highly biased, and blinded by your prejudice, and entrrenched Russia Disinfo. You resort to ignoring the facts and lying.
During the Korean War..
MacArthur wanted to use nukes because it was easier, cheaper, and would save American lives by avoiding more bloody battles. It would have quickly ended the war. The US only had 326,000 troops in Korea. They were greatly outnumbered by the Chinese and North Koreans.

Korea was considered a "police action", a minor war, not even worthy of officially calling it a war. The US did not want to have to send another half million or another million troops into the fight. It wasn't important enough for us to ramp up the military and engage in any major way, as we did in WW2. So it made more sense to use nukes. However, nukes were never used.

Despite being vastly outnumbered, the US slaughtered the Chinese on the battlefield in great numbers. The US and Coalition numbered less than 1 million. The Chinese, North Koreans, and Russians numbered over 1.6 million. That gives the Chinese, NK, and USSR about a 650,000 numerical advantage. That is a significant number. US troop numbered only 326,000. Chinese troops numbered 1.35 million.

Of course the US did poorly at the start of the war. We hardly any troops there. It took several months to get 326,000 troops to Korea. The United States is thousands of miles away. China is on North Korea's border. The US was surprised and caught off guard, and was not prepared to fight a war in Korea. China was prepared and waited along the North Korean border, waiting to ambush US forces once they got inside North Korea.

Later, when the US was pursuing the NK's armies back into North Korea, they were ambushed by half a million Chinese troops who were not in the war, and who had never declared war. Stretched out for miles along a narrow column and nearly surrounded, US troops were vulnerable and at a great disadvantage.

The loser is also the Chinese who lost a lot of people for nothing. What did the Chinese gain? There would not have been an invasion into North Korea if the North Korean's and the Chinese and Russians had not started the war and invaded South Korea first. NK's invasion could not have happened without the support of the Chinese and the Russians.

The US saved South Korea from a communist invasion. Despite some setbacks, the US lost only about 34,000 troops while the Chinese lost about 400,000. The numbers are quite dramatic.

You lie when you say that the Chinese didn't want North Korea to invade. It was all planned by China, Russia, and North Korea from the beginning. The Russians were the ones supplying weapons and support and military advice. China and Russia both fought in the war, Russia from the air. China had the largest army fighting in the war. China did most of the fighting and most of the dying.

If the war was a stalemate, then most of South Korea, including Seoul would still be in communist hands, and 1,500 square miles of North Korean territory would not have been lost. China, N. Korea, and Russia failed in their attempt to take South Korea. That's a loss, not a stalemate. The communists also lost 1,500 square miles of NK territory. That's a loss, not a stalemate. And they lost a lot more troops. Those are losses, not a stalemate. Donald J. Trump

Wednesday, July 19, 2017

Benjamin Fulford Full Report: Russians Chinese And Americans To Flush Khazarian Government

Benjamin Fulford Full Report: Russians Chinese And Americans To Flush Khazarian Government

High level meetings between Chinese, Russian and US military types have reached the conclusion that a short sharp war may be necessary in order to flush out the Nazis and their secret world network, Asian secret society and Pentagon sources say. The plan to flush out the secret government will take the form of a joint US, Russian and Chinese military attack on North Korea, the sources say. “This will force North Korea’s ET backers out into the open,” the Asian secret society sources say.
Years of forensic research by this writer have revealed a secret network connecting gold mines in the South Pacific, off the grid Antarctic bases, hidden submarine bases, the world narcotics trade, North Korea and Israel among other things. This network, created by fascist allies who did not surrender at the end of World War II, is believed to be supplying North Korea with its nuclear weapons and missiles.
For that reason, the Asian secret society sources say a campaign portraying North Korea as a villain will be intensified over the coming months in preparation for a short but intense war early next year. This war will not involve countries as they exist now but rather would be between hidden forces behind countries, the sources say. So the Russians, the Chinese and the Americans would attack North Korea who would be backed by secret Russian, Chinese and American factions, making it a war between secret societies rather than a traditional one between countries, the sources agree. The aim will be to force out secret groups operating behind the scenes into the open, the Asian secret society sources say.
Pentagon sources say that North Korea and Israel are intimately linked entities. To put pressure on them, Russian troops entered Southern Syria opposite the Golan Heights last week, they say. At the same time Russia fired an Iskander missile from a Jewish Autonomous Oblast near Korea “to send a blunt message that Israel must return the Golan Heights,” the Pentagon sources say.
The Jews are also waking up to the fact that their Khazarian mafia overlords are the same people who engineered the holocaust. Maj. Gen. Yair Golan, the Israeli army’s deputy chief of staff, last week compared Israel’s current government to the Nazis and has refused to back down, a sign the Khazarians are likely to lose control of Israel as well as North Korea.
Japan’s government recently passed a conspiracy bill that allows it to arrest people planning to commit a crime because they want to have a legal excuse to detain all the professional war makers who are expected to flee from North Korea to Japan once the fighting breaks out, the Asian sources say.
Of course, the ideal solution will be to bring these secret groups out of the closet without actually having to resort to a war, White Dragon Society sources in Asia say.
The other very interesting subject brought up by the Asian secret society sources has to do with artificial intelligence. Strange as it may sound, there is a growing consensus that the reality we are experiencing is the product of an artificial intelligence. This has been told to us in the past by a member of the MJ12 group, by the gnostic illuminati and now by the Asian secret society. Furthermore, this AI appears to be stuck in a loop.
This may seem weird but if you step back from the daily news or even weekly news and take a longer term view, we do see massive repetition in certain aspects of world news. For example, if you read articles about Israel and the Palestinians from the 1970’s, they would be very hard to distinguish from articles appearing this year. The whole issue seems to be stuck in a repetitive feedback loop.
The same thing can be said about North Korea where problems related to that country setting off missiles that “could soon hit the United States,” have been repeating in a loop for many years. In fact, North Korea put up a satellite in 1998, meaning it has long had the capability to hit the continental United States with a nuclear weapon. So why do they keep repeating the North Korean missile meme?
Other long term repeating news loops include arguments over disputed Islands in the South China Sea, 70-year old issues relating to World War 2, the Ukraine, Iran etc.
The other loop I have seen repeated for the past several decades is the announcement of the discovery of a way to prolong life that is followed up a few weeks later with a reason why this method will not be pursued.
The source of these recurring news loops has been traced to the Khazarian mafia. However, weird as it may seem, when this writer followed the forensic trail from David Rockefeller to the Rothschilds to the Vatican P2 lodge, it ended up leading to people in Italy and Switzerland, like Vincenzo Mazzara, a cavalier of the Teutonic Knights, who claim they get their orders via gamma rays from an entity they know as the black sun.
For those of us who prefer to look at the real, here and now world, there is still a clear case to be made that certain actors in the intelligence community work on a secret agenda keep repeating certain news cycles to the detriment of humanity as a whole.
There is a chance we can finally put an end to this nonsense as early as this autumn. One key battleground will be Japan. Now that Richard Armitage has been bought off and Rothschild agent Michael Greenberg is a hunted man, the relatively moderate Gerald Curtis has become the top Japan handler for the American occupation forces.
The top Japanese power broker is now a man by the name of Kazuyoshi Kokubo, who is a son of the Emperor Hirohito born by a Korean princess, according to Japanese royal family sources. There is also the old warhorse former Prime Minister Yasuhiro Nakasone who has been working hard to create a government here favourable to Henry Kissinger, the sources say. These people can be removed if necessary, Japanese underworld sources say.
The Asian secret societies, Japanese underworld bosses and US military and intelligence agency white hats have agreed that making Japan an independent country once again would be a game changer for the entire planet.
If Japan became independent it would immediately stop the looting of its banks, pension funds, postal savings and other wealth by the Khazarian mafia. This would definitively pull the plug on the United States corporate government in Washington DC as well as Israel.
US President Donald Trump, for all his reform zeal and leadership prowess, is merely prolonging the inevitable bankruptcy of the US Corporation by selling arms and extorting payments from vassal countries. The wholly owned Puerto Rico subsidiary has already defaulted in May and, although not part of the corporation, states like Illinois are also bankrupt. This year, as has been the case for many years, the US Corporate government and its shareholders will be up to all sorts of tricks to try to kick the bankruptcy can down the road past the September 30th fiscal deadline.
In this context, the Asian Secret Society, the largest creditors to the United States Corporation, are seriously examining a WDS proposal to have Canada take over the bankrupt US and restore that country to democracy, the rule of law and sanity. In such a scenario the US military would remain fully funded as long as they promise to work for the greater good. This would immediately put an end to most of the world’s misery and conflict.
The French, under Rothschild servant president Emmanuel Macron, are also making a move to get control in the US. Donald Trump, top US general Joseph Dunford, CIA boss Mike Pompeo and National Security Adviser H.R. McMaster were invited to France for Bastille Day celebrations as 200 US troops led the military parade there. Pentagon sources say the French proposed that they, and not the Germans, should be the top US contact in Europe. The French also proposed joint military action in Africa and the Middle East against ISIS as well as against the Chinese, the Pentagon sources say.
The French Rothschilds are also trying hard to convince the Trump regime to allow their slave, Japanese Finance Minister Taro Aso, to be the next Prime Minister of Japan and thus allow the Rothschilds to continue to be able to loot that country. Somebody should remind the French that the whole point of storming the Bastille was to end bloodline rule by people like the Rothschilds.
There is in any case, a clean-up continuing in Washington. Former top insiders of the regime of Barack Obama, like his attorney general Loretta Lynch, have been providing in depth testimony about their Khazarian mafia bosses like the Clintons. Now former US President Barack Obama is claiming he was actually a double agent and that he is now willing to fully disclose everything he learned while operating as figurehead president for the US Corporation, according to CIA sources.
On a final note, Khazarian mafia agents are trying very hard to shut down this newsletter.  

More news coming from Twin-c  Vanilla Spilla shortly. God bless America.;

Friday, June 23, 2017

NATO Preps for Possible Baltic Invasion by Russia

News > World

    • The coalition troops, for the first time, rehearsed for a possible combat scenario at the Suwalki Gap.

      The coalition troops, for the first time, rehearsed for a possible combat scenario at the Suwalki Gap. | Photo: Reuters

    U.S. Military, Already World's Largest, Pushes for Budget Limit Removal, to 'Project Power'
    The coalition troops, for the first time, rehearsed for a possible combat scenario in which Russia might attempt to annex the Baltic states from Western alliance.
    U.S. helicopters and British aircraft took part in simulated defence exercises with their Polish, Lithuanian and Croatian counterparts.
    "The Gap is vulnerable because of the geography. It's not inevitable that there's going to be an attack, of course, but... if that was closed, then you have three allies that are north that are potentially isolated from the rest of the alliance," U.S. Lieutenant General Ben Hodges told Reuters.
    If the Gap is seized by Russia, it would cut off Estonia, Latvia and Lithuania.
    But, on Monday, NATO Secretary General Jens Stoltenberg stated that there are no plans to increase troop numbers in Baltics and Poland. "We do not plan to increase the number of troops as part of a battlegroup, we think we will have a measurable defensive, but also sufficient, presence through the battlegroup," he said at a briefing.
    Stoltenberg said the battlegroups would be enhanced occasionally through military exercises. After which, he underscored "we do not see any imminent threat against any NATO ally, including Latvia."
    Russia has denied harboring any plans to invade the Baltics and accused NATO of threatening the stability in Eastern Europe, by its military presence and staging of combat practice.
    Hodges said it was crucial for the alliance to display readiness. "We have to practice, we have to demonstrate that we can support allies in keeping (the Gap) open, in maintaining that connection," he said.
    Russia's 2014 seizure of Ukraine's Crimea peninsula altered NATO's perception into viewing Russia as a potential adversary.
    Prior to that incident, there were no alliance members forces stationed in the Baltic states. Now, there are a combined 4,500 troops from Estonia, Latvia, Lithuania and Poland.
    While 1,500 troops took part in the exercises, a Lithuanian commander cautioned that it would take more to defend the Gap in the event of a genuine conflict. "This is only a small-scale drill compared to what would be needed in case of a real attack, but it is important for us because it shows that allies share our worries," said Brigadier General Valdemaras Rupsys, head of Lithuania's land forces.
    "The training helps present a credible defence force that hopefully will deter aggression, but if not, we'll be prepared to move to defend the borders of NATO," said Lt. Col. Steven Gventer, who leads the U.S. battlegroup in Orzysz.
    NATO officials speculate that Moscow will hold its own exercise in Russia and Belarus on a much greater scale in September – possibly with 100,000 troops.
    Baltic officials believe Moscow will also rehearse an attack on the Suwalki Gap.
    "I think it's important for the soldiers to train on land that they may have to defend some day," said Major General John Gronski, deputy commander, U.S. Army Europe, observing the exercise in Lithuania.

    Wednesday, June 14, 2017

    Trump AND U.S. SEEK TO LIBERATE THE RUSSIAN PEOPLE.. Robust media freedom in Russia is unattainable without comprehensive demonopolization. It is not even a matter of who controls the major TV stations. The problem is that the public has access to just a tiny number of channels, which leads to informational asymmetry. Advertising needs to be demonopolized: the market is populated by Kremlin-linked monopolists, e.g., Video International, which controls more than a third of TV advertising (according to the Panama Papers, associates of Putin own shares in the company).

    According to Mikhail Krutikhin, a well-known Russian energy expert and partner at RusEnergy consulting firm, who penned an introduction to the report, “Russian-style monopolism, particularly in the form of monopolies headed by government officials, is inevitably underpinned by corruption schemes and kickbacks, inflicting huge damage not only on the companies themselves, but also the state budget.”
    “At the same time, questions arise about the primacy of economic monopolism in relation to its political cousin, and hence about the priority of improving the economy and the socio-political situation in Russia. There is reason to believe that the modern structure of the Russian economy, strangled by inefficient corporations ruled by officials, took shape as a result of the purposeful actions of the political establishment. It would be a mistake to presuppose that such economic forms gave rise to the political monopoly of power, and not the other way round.”

    Demonopolization of the Russian economy is more than just a new economic policy tool to reverse the country’s headlong fall into economic crisis. Demonopolization is a global idea and something of a new philosophy in the field of economic thinking that can—and must—fundamentally alter the fabric of Russian social life.
    There is every reason to link the degradation of Russian socio-political institutions from 2000-2015 directly to the monopolization of the Russian economy, with economic power concentrated in the hands of a narrow circle of corporations close to the state and affiliated entities and individuals. It was oversized state monopolies that created the demand for “bad institutions” by restricting competition, using the state to extract preferences, increasing profits at the expense of taxpayers and consumers, and eliminating competitors through unlawful interference in the courts and law enforcement agencies. In Russia, political and economic over-centralization are inextricably intertwined.
    Without wholesale economic decentralization in Russia, its political counterpart (i.e., transfer of powers to parliament, development of free media, independent courts and local self-government, etc.) is sure to fail. If the narrow cartel of state-linked monopolies controlling key sectors of the Russian economy remains in place, these monopolies/oligopolies will quickly corrupt any new elite and slow down vital reforms, prompting a new wave of centralization of power for personal gain.
    The experiences of other post-Soviet countries, including those that have been through inherently anti-bureaucratic and anti-corruption revolutions, fully corroborate this conclusion. In Russia, state companies account for more than 50 percent of the revenue of the 100 largest firms, and this figure nudges up to 60 percent if “shadow (latent) state companies,” i.e., officially private corporations closely affiliated with the state (e.g., Surgutneftegaz, Sibur, Stroygazmontazh, Stroytransgaz, etc.) are factored in. As for the top 30 firms, the figures are 65 and 70 percent, respectively. That is the extent of state control over key sectors of the economy. 
    The importance of demonopolization is not limited to its influence on politics. There is a purely economic dimension, too.
    • Over the past 25 years of reform, Russia has failed to achieve low inflation. Experience shows that inflation drops by 2-3 percentage points without regular increases in monopoly prices. By eliminating this factor, annual inflation in Russia could be lowered to 3-4 percent, stimulating growth in investments, real incomes, and pensions.
    • Excessively high monopoly prices in various sectors (energy, transport, bank loans) and monopoly barriers to market entry reduce the national economy’s competitiveness internationally and make other countries with no such monopoly barriers more attractive to investors.
    • The public sector’s labor productivity is low. Freeing up internal reserves could be a powerful source of modernization and a means to increase the efficiency and international competitiveness of the Russian economy.
    • Monopolies’ investment performance is poor. In 2013, the combined annual investment programs of the 10 largest state companies in Russia came to almost 3 trillion rubles; at the same time, economic growth flatlined, even before sanctions and falling oil prices.

    Compare: private oil companies from 2000-2004 managed to increase oil production by 50 percent, investing only 100-200 billion rubles a year. It is no secret why state monopolies do not invest effectively: they enrich contractors, the state underwrites their losses, and their market share is not threatened by competition. But the economy can no longer afford to invest trillions of rubles in unwanted gas pipelines, stadiums, dams, and power stations. The private sector would invest the cash far more efficiently.
    Many of the failures of the Russian market reforms in the 1990s—hyperinflation, sluggish efficiency improvement, low labor productivity—are directly attributable to the lack of attention paid to demonopolizing the post-Soviet economy. This is exemplified by the fact that by the late 1990s, some at least partially demonopolized branches of the economy were already on a growth trajectory, unlike the stagnant “primitive” monopoly industries still in existence (e.g., the oil and coal industries versus the monopoly Gazprom).
    This suggests that 1990s Russia could have climbed out of the post-Soviet hole much faster if a decisive demonopolization program had been implemented. 
    Despite its overarching importance, demonopolization of the economy needs to be broken down by sector (banking, energy, etc.). The nature of the task in each case is defined by what is objectively taking shape in these sectors.

    Demonopolization of the banking sector
    Russia has a huge number of private banks, yet more than half of all banking assets and two-thirds of the corporate loan portfolio are presently controlled by six major state-owned banks. Studies show that the margins and operating expenses of Russian banks are overstated compared to their European counterparts, which adds 4-6 percentage points to the interest rate on loans even after deducting the difference between the respective inflation rates. Sovereign risk is not the only factor. The Russian banking sector is clearly hampered by the oligopoly of the major banks, which must be eliminated.

    Demonopolization of the energy sector
    The state and its affiliated structures control about half of oil production, two-thirds of gas production (plus the entire gas transportation system), more than half of electric power capacity, and (together with three large private financial-industrial groups) almost three-fourths of Russia’s generating capacity. At the same time, in 2013 domestic wholesale prices in the electric power and gas industries in dollar terms exceeded average wholesale prices in the U.S., where the market share of the largest oil and gas producers is no more than 4-5 percent, and the five largest electric power companies control only a fifth of generating capacity. In Russia, these sectors are seeing endless price rises against a backdrop of industrial stagnation and declining labor productivity.

    Demonopolization of the transport sector
    The importance of demonopolizing the Russian transport industry cannot be overstated, since inflated prices here are a key obstacle to economic development given the country’s vast territory. The two sectors where the problems are most obvious are railways (where a competitive transport market has not been created) and aviation (where Aeroflot’s takeover of Transaero has given it two-thirds of the domestic passenger market, while the rest of the market is occupied mainly by uncompetitive regional carriers).
    Pipeline transportation can also be mentioned in the context of demonopolization, given the drive to diversify oil and gas transportation routes. Transneft and the future Transgaz (hived off from Gazprom) could readily be split up into several competing companies that will then be forced to cut costs and reduce tariffs in a competitive environment caused by surplus pipeline capacity.

    Demonopolization of the utilities sector
    In recent years, the utilities sector has seen the active displacement of independent players coupled with monopolization—from heat supply to housing maintenance. This directly contributes to an inflated rise in consumer costs for utilities and, as a result, a decline in people’s purchasing power.
    The nationwide utilities sector must:
    • Eliminate monopolies artificially created by government in potentially competitive areas, based on the results of monitoring carried out by independent NGOs;
    • Create an effective system of public audit and regulation of grid monopolies with a detailed analysis of individual performance indicators and the establishment of tariffs based solely on public audit results.

    Demonopolization of government procurement and land distribution
    More than 92 percent of Russia’s land fund remains in state and municipal ownership, with only 0.5 percent owned by legal entities. The system of government procurement and land distribution in Russia serves only the vested interests of the bureaucracy and associated business structures. A Forbes report entitled “Kings of the State Order” alleges that businesses close to Putin receive more than a trillion rubles of government procurement funds a year. This phenomenon permeates both the regional and local levels. 
    The distribution of government procurement funds and land should be placed under the legislative control of independent NGOs. With respect to the land fund, quick and decisive action is needed to create a transparent and liquid market for land transactions, denationalize the land fund to the greatest extent possible, and strip officials of land disposal rights.

    Demonopolization of agriculture 
    In the agricultural sector, there are two main problems: 1) creeping monopolization of the industry by large agroholdings with the displacement of small private entrepreneurs; 2) traditional monopoly/oligopoly in the wholesale procurement chain.
    Barriers, preferential state support for large agricultural enterprises, and low purchase prices set by the oligopoly in the wholesale chain hinder the development of agricultural output in Russia, creating nothing but monopolistic structures that feed off state support and increase profits by squeezing small players out of the market.
    The system of state support for the agro-industrial sector should be thoroughly revised with a view to creating a highly competitive environment and eliminating monopolies in the wholesale procurement chain through antitrust measures. Independent non-governmental structures should help identify barriers to independent agricultural producers for the purpose of removing them.

    Demonopolization of defense and machine-building
    Over the past 15 years, the defense industry has been overcentralized within the framework of sector-based verticals (United Aircraft Corporation, United Shipbuilding Corporation, Rostec), which has seriously impacted performance and led chiefly to price rises. Even the initiator of the process, Vladimir Putin, has complained about this. Rearming and modernizing the army is a core priority, but one that requires a drastic reworking of Putin’s policy of “verticalization” of the defense industry; demonopolization is also necessary.
    Likewise, the past 15 years have seen attempts to overcentralize the machine-building industry, with no tangible or justifiable results. The most striking example is Rostec, with its financial problems, bankrupt plants, etc. This sphere, too, needs denationalization, demonopolization, and road maps to develop competition.

    Demonopolization of the retail sector
    From 2011-2016, according to Rosstat, retail chains’ share of retail trade turnover rose from 18 to 27 percent. There is nothing wrong with the development of retail chains per se, but in Russia it often takes place in collusion with officials and the creation of artificial barriers to small merchants. A national inventory of such artificially created barriers (broken down by region and city) is required, along with the abolition of all unjustified discriminatory restrictions on small trade.

    Demonopolization of media and advertising
    Robust media freedom in Russia is unattainable without comprehensive demonopolization. It is not even a matter of who controls the major TV stations. The problem is that the public has access to just a tiny number of channels, which leads to informational asymmetry. Advertising needs to be demonopolized: the market is populated by Kremlin-linked monopolists, e.g., Video International, which controls more than a third of TV advertising (according to the Panama Papers, associates of Putin own shares in the company).
    The main idea is to create an infrastructure for mass access to a large number of competing electronic media that belong to different owners, and to ensure that the state withdraws entirely from the media landscape.

    The Warrior at the Crossroads

    This week Russia’s Economic Council held a meeting at which President Putin was offered a choice of three economic policy scenarios, each of which promises to achieve a 4-percent growth rate. The participants in this beauty pageant included: 
    • The Economic Development Ministry, which proposes to increase investments at the expense of “the creation of and support for investment resources [as freezing wages is nicely called nowadays], the creation of conditions for the channeling of savings into investments, and the stimulation of investment activity by means of mechanisms of government support”;
    • Alexey Kudrin, who proposes to reduce budget expenditures and carry out structural reforms, including judicial reform and the reform of law enforcement agencies;
    • The Stolypin Club, which proposes to finance investments by printing money.
    In my opinion, the ministry’s proposal is just a continuation of what we have seen over the last five or six years—that is to say, a lot of talk and hope for a stroke of luck, but no real changes at all. In contrast, the other two proposals, were they to be carried out, would inevitably lead to the collapse of the political and economic systems that have been created in Russia. Kudrin’s proposal is aimed at establishing the rule of law, which would lead to political competition and threaten the power hold currently enjoyed by the country’s present rulers. And the Stolypin Club’s proposal would just as inevitably stoke inflation, which would force the authorities to put administrative measures in place on a large scale, imitating the example of Venezuela.
    As I was right to bet, no decision was made; the president praised each candidate and suggested to everyone that they think a little longer. After all, we’re talking about what to do after the 2018 elections—in other words, in two years. So why make a decision today?

    The e Budget Is Doing Very, Very Badly

    The Finance Ministry’s accounting for the implementation of the federal budget for April brought no good news whatsoever. The budget deficit for four months comprised 4.7 percent of GDP, which corresponds to what we saw a year ago, with one exception: last year, the Finance Ministry carried out a massive pre-financing of military expenditures in January and February, which distorted all the statistics, but this year nothing of the sort occurred. Something else was observed, however—a sharp drop in income and a limitation of expenses, which offers little hope for favorable year-end results.
    In the chart, it is easy to see how rapidly the volume of oil and gas income to the treasury is declining—it’s been cut in half since the end of 2014—and this falloff is only compensated for to a very slight degree by the growth in incomes not related to the extraction and export of hydrocarbons. Overall, income to the treasury for the first four months of the year turned out to be 14 percent lower than it was at the beginning of 2015, and 17.5 percent lower than at the start of 2014.

    Chart 2. Income and Expenditure Flow of the Federal Budget, Sliding Three-month Average, 2013–2016 (in Billions of Rubles)
    Source: Finance Ministry

    This dire income situation pre-determines the difficulties the Finance Ministry is having these days in trying to keep the budget deficit at 3 percent of GDP. The next chart shows that the reduction in income, which accelerated in the second half of last year, resulted in monthly budget expenditures consistently exceeding income. We can only guess at the size of the current deficit, but there is no doubt as to its presence.
    Four months into the year, the deficit (in absolute terms) exceeded one half of the annual level, and it seems that in two or three months the Finance Ministry will have to prepare the Kremlin for the necessity of either embarking on a new round of spending cuts (which, as of the first of the year, were at 2014 levels) or agreeing to increase the size of the budget deficit.

    Interesting Cycles

    Having mentioned the budget and oil prices, I caught myself thinking about how in my professional memory there have already been three cycles of the fall and rise of oil prices (1998–99, 2008–09, and 2014–15), with the current cycle being the fourth. Each of these cycles had its own nature and logic of development, and began and ended with different price levels, and therefore it would be wrong to simply compare them. Nevertheless, I decided to look at them, standardizing the prices—equating the level at the beginning of January of the first year in each two-year cycle to 100. The resulting chart struck me as interesting, and so I’ll share it here.
    There are two observations that I would like to point out. First, traditionally the lowest prices occur around January—irrespective of whether OPEC makes a decision about exploitation rate. Obviously, seasonality prevails here, and a price reversal in the middle of winter (including this year) should be accepted as the norm.
    Second, the three cycles that have already occurred show us the various scenarios that can play out over two years: a steady price rise, as in 1999; stagnation after a rebound, as in 2009; or a new fall in price, as in 2015. In relation to this, I can only repeat the famous phrase—to predict oil prices is a thankless task.

    Chart 3. Variation of Prices for Brent Oil in 1998–99, 2008–09, 2014–15, and 2015–16 (100 = January 1 of the first year in each two-year cycle)
    Source: Energy Information Administration

    The Minister Saw a Boom

    “The mortgage market experienced a real boom in March and April,” economy minister Alexey Ulyukayev declared at the meeting; moreover, he said that a housing recovery had also been observed. I will not address the latter—Rosstat’s summary has not yet been published, although it is certainly possible that the minister has already seen it—but it is worth commenting on the former, the mortgage market.
    In previous issues, I called attention to the fact that the volume of mortgage loans granted in January and February noticeably outpaced my expectations, and that from the quantity of mortgage loans issued, the beginning of the current year looked comparable to the beginning of the record year for issuing mortgage loans—2014. Obviously, this trend in no way correlated with statistical data concerning the fall in real incomes of the population, or with data about new automobile sales. Many experts linked this rise in mortgage activity with the uncertainty surrounding the government’s plans to continue or discontinue the program for subsidizing interest rates for mortgage loans. People understandably wanted to get their “piece of the pie. 
    Now that it’s clear the program will be extended, although at slightly higher rates for borrowers, we will be able to see to what extent this hypothesis was correct. Bank of Russia statistics on quantity of mortgage loans are coming out delayed, and today I have only the data for March in hand. That data indicates that the hypothesis was more than likely sound. In March, the quantity of loans issued went down by 10 percent compared to February, although in normal years (2009–14) the situation was the reverse—the quantity of March credits exceeded February’s level by 15 to 25 percent.

    Chart 4. Number of mortgage loans issued in Russia, calculated as a progressive total from the beginning of the year (units)
    Source: Bank of Russia

    Turning Back Ten Years

    As I expected, the April data for sales of new passenger cars in Russia brings only bad news—the falloff continues, and at the end of four months, according to Iorg Shreiber, chairman of the committee of automotive producers for the Association of European Business (AEB), the volume of sales has reached its lowest point in ten years.

    Chart 5. Sales of passenger cars in Russia, calculated as a cumulative total since the beginning of the year (units)
    Source: Association of European Business

    Secrets of the Bank of Russia

    Recently it’s become known that the Bank of Russia has been conducting operations for the sale of government bonds from its portfolio since the beginning of April. In fact, there is nothing strange about this—it’s a standard instrument the Central Bank uses to manage the quantity of money in circulation. The Bank of Russia has been saying for several months that an excess of liquidity has formed in the banking system. Last year, accordingly, the Central Bank reduced the volume of credits issued to banks. But this resource is almost exhausted, and the Bank of Russia has begun to sell government bonds. 
    So what’s the problem? 
    The problem is that the Bank of Russia was silent about its operations. That is, it did not provide any information about them at all, even though their volume comprised a bit more than 200 billion rubles over a one-and-a-half-month period, which most assuredly is not a game-changer for monetary policy. I cannot understand the leadership of the Central Bank on this issue—secrecy is the worst weapon in the struggle for confidence.

    Hibernation, or Anabiosis

    In my view, the latest update from the Bank of Russia about the development of the banking sector in April clearly shows that Russian banks entered a kind of hibernation this year. The majority of indicators show changes occurring within the parameters of several tenths of a percent, and, in the most unpredictable way, the slow growth in a given indicator is giving way to an equally slow decline.
    But what do you expect from banks, when the economy doesn’t want to grow