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Russia Deploys Exotic New Weapon: A “Budget Surplus”

The price of oil is rising, which is obviously good news for those who sell it to the rest of us. Russia in particular seems to be enjoying the current trend, so much so that — if I’m understanding this correctly – Moscow is now receiving more in taxes than it’s spending. This is producing something called a “budget surplus,” which is a kind of currency war weapon that can be deployed to improve a country’s geopolitical position. Here’s a quick overview:

Russia To See Oil Revenues Jump Fivefold

(Oil Price) – Due to the oil price rally, Russia expects its oil and gas revenues to jump fivefold compared to the expected revenues set in its 2018 budget, according to the Finance Ministry that now expects Russia to post a budget surplus for the first time since 2011.

Oil and gas exports account for around 40 percent of Russia’s federal budget revenues.

Russia’s revenues from oil and gas sales are now expected at US$44.4 billion (2.74 trillion Russian rubles) for 2018, up from US$8.5 billion (527.6 billion rubles), according to a budget amendment by the Finance Ministry.

Due to the unexpectedly high oil prices, Russia is currently on track to book a first budget surplus since 2011, at 0.45 percent of gross domestic product (GDP), compared to previous expectations for a 1.3 percent of GDP deficit. The previous forecasts, however, were based on assumptions that the Urals crude blend would average around $40 a barrel. Between January and April, the price of Urals has averaged $66.15.

The additional oil revenues that Russia has earned above the Urals price assumption of $40 a barrel will be allocated to reserves instead of to spending, TASS news agency reports.

Analysts commented on the proposed budget amendment that Russia will have more revenues while it continues to plan for expenditures close to the original budget law.

“This will provide a very useful cushion to lean on if there are some adverse macro or geopolitical shocks,” Ivan Tchakarov, chief economist at Citi in Moscow, told Reuters.

One way that Russia is likely to use this exotic new weapon is to buy gold. The Russian central bank is already one of the biggest buyers of the metal, increasing its reserves by nearly 500 tons in less than three years – while, remember, it was running budget deficits.

Russia gold reserves Russia budget surplus

Now, with a surplus to deploy, it’s reasonable to assume that the aggressive gold buying will at least continue and very possibly accelerate. The result: An increasingly gold-backed currency in a world of un-backed fiat, something that’s more of a threat to US financial hegemony than most of the hardware in the Kremlin’s military arsenal. For more on how this might play out, see Putin: Russia Needs to Get Rid of ‘Dollar Burden’ in Oil Trade. A few relevant quotes:

A few days ago, President Vladimir Putin was quoted as saying that Russia was mulling over ways to ‘get free’ of the U.S. dollar burden in oil trade as part of a plan to boost its national economic sovereignty…Oil is traded in dollars on the exchange, TASS news agency quoted Putin as saying. “Certainly, we are thinking about what we need to do in order to get free of this burden.”

 

Emigrate While You Still Can

32 thoughts on "Russia Deploys Exotic New Weapon: A “Budget Surplus”"

  1. A budget surplus? This has to be a violation of the Geneva Convention. Against any all moral principles. That surplus MUST be immediately distributed to the Military Industrial Complex. Russia should be brought before a tribunal at The Hague for their heinous disregard for human rights. If this concern for the middle class is allowed to continue, before you know it, peace could start to break out.

  2. “TASS news agency quoted Putin as saying. ‘Certainly, we are thinking about what we need to do in order to get free of this burden.’ ”

    Read between the lines of this quote and it immediately becomes clear what he’s really saying. They already know how they’re going to free themselves; it will be with the oil-for-yuan-for-gold contract recently introduced in Shanghai. Game-set-match.

  3. Oh dear, there seems to be some anst around here between whose regime is best. Well my friends, the truth is that neither systems works for your average Joe, both (and all) systems are exploitative of the general population that are not plugged in to the guilded trough.

    The only sustainable answer is for less government, more local/regional controls and a sound economic system based on sound money and free local markets. We are working on this in UK: http://harrogateagenda.org.uk/

    Currency is all around you, even now, as you read this webpage.

    You have had a feeling all your life, something is wrong with our world.

    Something about our economic system just doesn’t add up.

    Where does all the money go? The government? What do “They” do with it?

    Every minute, our money is worth less and less.

    We are forced to work more, and more; to compensate for this discrepancy.

    Who is to blame? How does this system function?

    Is there a way to profit from it?

    Is there a way to protect ourselves from this financial Matrix?

    What does the future hold?

    I have written a book about all this and much more (100,000), unpublished as yet. I have a PDF available to anyone who would like to read it on request to: peter@underco.co.uk

  4. Now, with a surplus to deploy, it’s reasonable to assume that the
    aggressive gold buying will at least continue and very possibly
    accelerate.
    ———

    if this goes as macro analysis I FEEL PITY!!!!

    #1 RUSSIAN don’t buy gold from federal revenues,

    IT DOES VIA CENTRAL bank, BY PRINTING money aka rubles!!!!! Russian m2 grows about 10%

    #2

    Russia WONT START BUYING GOLD MORE aggressively!!!!!

    Russian central bank buys only physical gold PRODUCED INSIDE COUNTRY!!!!

    RUSSIAN production is about 200 *250 . so central bank buys almost everything!!!!

    by Russian laws THERE IS NOT PRIMARY MARKET for GOLD, all gold is shipped thought gov / central bank!!!!!!!!

    private company cant just produce gold and export it!

    alx

  5. Ever notice how rampant GMOs grow all over American’s farms?
    Ever notice that Putin banned GMO’s in Russia and is committed to becoming the world’s largest producer of healthy organic produce?
    Need I say more about the capitalist government of the USA, inc. permitting evil companies such as Monsanto to poison America’s food supply?

  6. Ever seen how most Russians live lately? Rubbish housings. Ever seen how Pootin lives lately? Gold gilded palaces.

    Need I say more about communism treachery?

    1. Please tell us about your time in Russia! How did you survive life in sturdy Soviet era apartments built like fortresses or double-insulated log cabins built with hand-made loving artistry, eating nothing but organic and free-range food?

      1. Please tell me you talk big because you are an overfed, welfare, lazy American living off your children’s inheritance.

        What do you care? You’re fat and McDonald’s is open 24 hours for you.

        1. living off your children’s inheritance.
          ———–
          parents may be ?

          did you learn English in USSR?

          1. That’s what your children will call you. 😉
            ————-
            learnt from own life ?

            so i assume YOURS already do ?

            uneducated moron ?

    2. BS. Russians have far better morals than most Western Countrues and are very happy even if many live in modest homes . They are not slaves to the Globalist like we are

      1. Ummm no. When a world leader steals a Super Bowl Ring and will not even return it tells me he suffers from American envy and why everything Russian looks American.

        1. Ummm no. When a world leader steals a Super Bowl Ring
          ———

          if I sue you in court, will you show any proofs ?

          or you are just moron w.out life ?

          1. I think it was caught on video. That little ucker just walked off with it surrounded by his bodyguards.

            What is he so afraid of if Russians like him?

          2. you think
            as caught on video.
            ——
            moron ?

            again moron fancy any proofs?

            I THINK YOU SUCK DICKS AND don’t spit!!!!!

          3. I think it was caught on video. If I remember it showed Pootin (little ring thief) being immediately surrounded by his bodyguards walking out the room.

            But it could have been by imagination. However, the guy telling the story wasn’t imagining it. He told it to a press club about that little ring thief of yours.

            Seems, Pootin has some kind of poor boy complex.

          4. What is he so afraid of if Russians like him?
            ———

            did he personally tell you this ?

            tv glued moron ?

          5. Yes, since that little ring thief of yours will KILL any journalist who does not do what he says. A reported 120 + has been killed by the little man.

            So natch they will report what he tells them.

            Say, why don’t you become a journalist in Russia? You seem to have a BIG mouth and like him?

          6. Wrong big time ,
            Journalist have extensive freedom in Russia these days and are encouraged to voice their opinion . It is only in neighbouring Nazi run Ukraine whee they kill any Russian or Ukrainian Journalist reporting the truth and this Fascist led Poroshenko Govr putvin place by your F the Europeans Nuland and Traitor McCain who staid there proudly with the Nazis and in Syria with his Obama and Clinton creation ISIS

          7. That’s what Pootin likes you to think. Remember, these journalist are under HIS threat and thumb.

            Sort of like you, or either that YOU are the moron?

    3. Ever seen how most Russians live lately? Rubbish housings. Ever seen how Pootin lives lately? Gold gilded palaces.
      ———

      no . and apparently you did not too!!!!!!!!

      but i saw HOW PEOPLE LIVE IN DETROIT, USA FOR EXAMPLE!!!!!!

      MORON? or just Ukraine citizen ?

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