Streetwise Professor

April 13, 2013

Putin Invites a Woman to a Stagflation Party

Filed under: Economics,Politics,Russia — The Professor @ 9:43 pm

As described in the WSJ, Russia has “slashed” its official 2013 growth forecast by a third to 2.4 percent: this new figure is less than one-half of what Putin had promised during his coronation campaign. And given that the year-on-year growth figure for February was less than 1 percent, 2.4 percent looks rather optimistic: I get the sense that Russia is in the process of revising expectations (A/K/A telling the truth) slowly.  Meanwhile, Russian inflation is running at around 7 percent: that figure for March was considered a victory after the 7.30 percent figure for February.  (Bloomberg seems to live  perpetually up Putin’s rear end, and typically spins things in his favor, so read the link with a grain of salt.)

This puts Putin’s newly appointed central bank head, Elvira (Mistress of the Dark Empire?) Nabiullina, in a difficult situation of being the girl at the stagflation party.  Putin is clearly nervous about Russia’s sputtering growth. He has promised a lot, and a failure to deliver will only further complicate his increasingly fraught political situation.  He has indicated a clear preference for the Russian Central Bank to loosen in order to spur growth.  Deripaska has been outspoken in his advocacy for the bank to reduce interest rates, and I imagine that other oligarchs (particularly in steel and coal, which have reported some rather heavy losses of late) are of like mind.  But bending to oligarchic pressures would likely spark greater inflation that would hit ordinary Russians-most notably low income Russians, especially pensioners, who are Putin’s prime constituency.  The pressures on Nabiullina to loosen Russian monetary policy will be pretty intense.

So what will Putin do?  His economic options are limited, and those that he is likely to try are unlikely to improve growth but will exacerbate inflationary pressures.  Consequently, expect a political response to distract attention, most likely a further intensification of crackdowns on the opposition, and fomenting anti-US sentiment.  He is not quite yet in Hugo Chavez territory, but there are similarities.

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  1. Bloomberg indiscriminately praises all in the power elite and is a conduit of propaganda for whatever The Bilderberg Group agenda and other central planning groups are hawking! Putin can’t be too happy with what down in Cyprus. How do you think he will respond in order to exact revenge. Perhaps nationalize a western companies holdings and give them pennies on the dollar as they are kicked out

    Comment by Bob — April 14, 2013 @ 9:22 am

  2. Professor:

    Why are you not on Linked In?

    Your ‘Student,’

    Comment by ObamaPutin — April 14, 2013 @ 7:34 pm

  3. Vlad-I am on linked in. I’ve been on it since probably 2004. Not under Streetwiseprof 🙂 Under Craig Pirrong.

    Welcome to class!

    The ProfessorComment by The Professor — April 14, 2013 @ 8:06 pm

  4. As soon as my privileges are restored, I shall link to you! Here is some light Sunday reading for you [as well as my classmates]:

    Comment by ObamaPutin — April 14, 2013 @ 8:15 pm

  5. Thanks, Vlad. We can all learn from each other. Will read with interest.

    Were you a bad boy to get your privileges suspended? 😛

    The ProfessorComment by The Professor — April 14, 2013 @ 8:30 pm

  6. It doesn’t take much on Twitter to get your privileges revoked. Sort of like being one of Putin’s friends or business partners. One day you’re eating caviar in St Petersburg. The next, you’re eating fish-eye soup in Kazakhstan.

    Comment by ObamaPutin — April 14, 2013 @ 9:27 pm

  7. @Vlad-Tell me about Twitter. I was suspended on Twitter numerous times in late-2012. Ostensibly for the egregious sin of hitting “reply” . . . er, I thought the point of “social media” was to be sociable . . . i.e., to communicate. But according to the Twitter Gestapo, “unsolicited replies” are verboten. Except that I was often suspended for replying to tweets that included me, or were replying to mine, so the “unsolicited” part was complete BS. I have a sneaking suspicion that it was more the conservative/libertarian nature of what I said that motivated the suspensions. Debates about guns were real suspension bait.

    It seems that suspensions on Twitter ebb and flow. Apparently they are ticking up again, though I have escaped so far.

    Twitter is run by progs . . . so I have my suspicions.

    But you mentioned Linked In. I hadn’t heard about people getting privileges suspended there.

    The ProfessorComment by The Professor — April 14, 2013 @ 9:45 pm

  8. Professor:

    Linked In does not do so. You have the clear, uncluttered mind of an academic. I have the distracted one typical of your students. Linked In is very professional. But make no mistake, run by Progs, too.

    Twitter, on the other hand, seems to be selective in whom (or is it who?) they suspend. And you surmise correctly. Fox News last week (they slant right, but ONLY slant, not in the drink like the rest of the MSM) week gave some anecdotal evidence. But here are two other sources:

    And one more for fun:

    Finally, Dr, I was in Chicago for some training in Feb & got to witness the closing bell @ the CBoT. Not sure when it will stop altogether. Open Outcry markets have a heartbeat & lifeblood all their own: seething & swirling. Back in 2005, I visited the Toronto Stock Exchange, not realizing that the trading floor had long closed w/ the advent of electronic trading. However, I ignorantly asked if there was a tour. And the cute & attractive Public Relations woman asked me to hold on a moment, after informing me that there was no trading to ‘see.’ After a brief wait for a man to finish a conversation, she introduced me to a man who’s name escapes me now. But he was the man who executed the last human-human trade on the Toronto Stock Exchange, that day the floor went silent.

    So those were my bucket list experiences that provides our 6degrees (great album by Dream Theater) of separation, Dr.

    My last one will be if you ever decide to attend one of the Annual Conferences of the Civil War Trust. A fascinating group. My last link in this (far to wordy scribe):

    Jackson MS is not TOO far from Houston. Think about it if you are not already committed.

    Smith, Bastiat, Hayek, & Mills type regards,
    Vlad P.

    Comment by ObamaPutin — April 14, 2013 @ 10:19 pm

  9. We are linked & Twitted.

    Comment by ObamaPutin — April 16, 2013 @ 10:05 pm

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