Thread by @Prune602

‼️ The Russian Debt Thread: Part 6

(You might want to bookmark this)

If you’re seeing this and don’t know where Part 1….

It’s right here

https://twitter.com/prune602/status/1845617033288757662

At the end of the last thread we were discussing Russia’s efforts increase Federal Budget Revenues while also trying to keep basic food prices down so that “official” inflation would stay low. To the point of bankrupting the farmers.

But at least the prices stayed low right?

Because I’m feeling inspired by thoughts of the French Revolution and Russia’s reputation for grain, let’s focus on bread! I mean, that should be cheap in Russia right? They just made the market is flooded with cheap grain by limiting the farmers earnings through export.

Here comes a common problem with their plan.

🇷🇺: THERE’S NO SHORTAGE OF FLOUR…or there shouldn’t be! LIES!!!!

https://twitter.com/prune602/status/1808160115469513117

See, they made it unprofitable for Russian Farmers to export their grain and thus flooding the domestic market with grain making it significantly cheaper than it should be, and at the farmer’s expense.

But they forgot to put plans in place to deal with the export of FLOUR 😂

https://twitter.com/prune602/status/1808160193177342119

This loophole happens in other places, where they thought they had controlled everything, but actually they hadn’t. So the cheap flour went to places like China.

But that’s not the only problem. Flour prices were increasing…

https://twitter.com/prune602/status/1808160200357982650

See, the mills require equipment. Purchasing that equipment requires capital and/or financing that is getting more expensive as time goes on. And there is a LOT of industrial equipment that Russia DOES NOT MAKE.

So hypothetically, if Russia decides to devalue the ruble/print more money as a part of a solution to solve their deficit problem…the equipment just got more expensive. They’ve got to pay that somehow.

Note 👆this might be the best case scenario.

You have to figure out how you’re even going to pay for it. Even if they were going to China for the equipment, China does NOT want secondary sanctions.

So even if this equipment IS NOT sanctioned (because not everything is), Russia is shady & China knows it.

Assuming China agreed to sell Russia the equipment, their bank has to get ALL the paperwork together to prove that this transaction doesn’t violate sanctions. Which can take a lot of time, and time equals money. They’re going to include that expense.

There is definitely a reason it takes time to investigate these things. I mean, when you tell everyone you’re building drones in a bakery…don’t be surprised when business associated with the bakery get sanctioned.

🇷🇺: RUSSOPHOBIA!

https://twitter.com/prune602/status/1714017570196467886

And there are ways that things can unexpectedly fall under sanctions

Like when Putin used his property seizing decree AGAIN today. It’s possible that when these are placed under the “management” of an assigned Russian entity, that it makes them suddenly subject to sanctions!

https://twitter.com/prune602/status/1846175351954698719

So it’s not just the specific pieces of equipment that could be sanctioned, but it could be ANYTHING related to sanctioned entity.

🇷🇺: SANCTIONS DON’T HURT! I’M STILL GETTING SANCTIONED EQUIPMENT!

Remember: Evading Sanctions still hurts Russia!

With increased risk comes increased costs, which Russia is already struggling with.

And there is a point where RISK becomes to great and certain entities no longer supply Russia OR Russia just can’t afford it.

But this also means that Russia may have to wait even longer to get the equipment and it may be of a reduced quality.

The high price of getting equipment PLUS the high price of financing will have to factored into costs.

But that’s not ALL!

There’s the labor shortage!

Remember, the one Putin said would be solved the mechanization? The mill has to pay a competitive salary to keep their employees, but the Russian government and Military Industrial Complex ALSO wants those employees!

How many of them that sign contracts never return?

In order to attract them, the Government keeps offering higher and higher salaries, both in the Military AND the Military Industry. That means the Mill needs to increase their pay to keep their employees. Which means prices need to go up.

The Federal Government then needs to find a way to pay the employees more so THEY get them. So they increase taxes!

🇷🇺: Your crime was being too profitable!

https://twitter.com/prune602/status/1796616568408801306

See how we’ve gotten into a feedback loop?

*sigh* it gets worse…(can you believe that we’re still just talking about bread)

The Russian government has a branch that I think of as being the Russian Governments Henchmen.

The Federal Antimonopoly Service (FAS)

*SPOILERS* They do not due what it sounds like they should do.

And you’d be surprised how far their reach is.

en.wikipedia.org/wiki/Federal_A…

From now on, I’ll refer to them as the FAS to save us all a lot of time.

Whenever the government wants to exert pressure on a business because things aren’t going the way they like, they call in this bunch.

And here recently, efforts are being made to give the FAS MORE power.

The problem is, most of the time when the FAS is called in, it doesn’t really solve the underlying problem.

There may be times when they do what they’re supposed to do, but there are many cases of them doing…other things.

Actually…when you think about it…is Russia ever REALLY solving the root of the problems? Or are they just making temporary fixes…that make it significantly worse in the long run

🇷🇺: That’s future Russia’s problem!

Now we need to see what the FAS is sent to do!

And we will in Part 7!

Here’s Part 7

https://twitter.com/prune602/status/1846302101720437007