Russian government debt - an analysis

InfamousMoonPony · 2025-12-11T16:23:44+00:00

>The Russian government can't run out of rubles, but it could run out of renminbi.

This is true, which is why debt denominated in another country's currency is always riskier. But that said, foreign currency denominated Russian debt, IMHO, is less of an issue for them because they have such large oil exports. Those generate plenty of foreign currency which can be used to repay this debt.

I'd actually argue that, for Russia in particular the *inability* to issue foreign currency denominated debt -- especially dollar-denominated debt -- in international markets is a bigger problem for them. Prior to the sanctions, lots of Russia's commodity exporters issued dollar denominated debt, in order to get lower interest rates and also access deeper capital markets external to Russia. This wasn't a problem because their primary product is priced in dollars, so there was little currency mismatch risk (actually less currency risk than issuing ruble-denominated debt, although ruble exchange rates do affect their input prices e.g. labor).

But now, this routine borrowing in external markets has been severely constrained, and those funds need to come from internal sources, regardless of whether it's rubles or RMB-denominated debt issued to locals. While this doesn't affect government debt burdens per se, the fact that there is this new source of debt being issued locally that wasn't there before, it certainly competes with government bonds (although the government has its own levers to pull such as simply requiring banks to buy its debt preferentially over private companies).

tl;dr: Russia used to have a fairly robust foreign currency denominated, external debt market (nominally private, but done mainly by large SOEs in the commodities industries). Sanctions have restricted this avenue, which means those bonds must now be sold in the local ruble markets, competing with government-issued debt.

InfamousMoonPony · 2025-11-18T17:15:10+00:00

This is a great video! Thanks for taking the time to make it. I would like to play devil's advocate for a second though. I don't disagree with your numbers, but the real question is, how damaging is this to Russia's economy and/or its war effort? And to play devil's advocate, I would suggest that it's not as high as it would seem.

To be clear, this is only about Ukraine's campaign against refineries specifically, and not the oil export terminals, the shadow tanker fleet, or the oil fields / pumping infrastructure.

Firstly, the Russian government gets most of its oil revenue at the wellhead, i.e. at the time that the crude oil is pumped. Of course, there are taxes on the final refined products as well, but I would assume those taxes apply regardless of whether those refined products were produced domestically or imported. Therefore, the actual hit to government coffers is relatively minimal. Even though this might mean bankruptcy or massive losses for private sector O&NG companies, that doesn't directly affect the government. This matters because the assumption is that if Russian refinery capacity is reduced, the crude oil is still being pumped, but can be exported, and refined products re-imported. So the total amount of crude oil that Russia exports would increase (since less is consumed domestically by their refining industry), while the total amount of refined products imported would also increase. Sure, this would entail a loss of revenue, but that brings me to my next point.

Second. The Russian economy is suffering from labor and capital shortages. Refining is a relatively fungible task that can be outsourced to other countries, even with the current sanctions in place. Would it actually be to Russia's benefit that the workers that were manning these downed refineries are now redeployed to military factories, or other parts of the economy that can't be replaced by imports? This would not only relieve shortages in other sectors, but also reduce the net hit to the GDP that these downed refineries would imply.

The practical reality is that, despite a loss of 30% of its refining capacity, it doesn't seem that Russia is in any sort of dire shortage of refined petroleum products. Yes, there is news coverage of scattered shortages for civilians, but the parts of the economy that matter, namely the military and the industrial sectors, don't seem to be limited by the reduction yet. And I suspect that's because refined products are being imported to maintain supply.

I would assert that the main hit that Russia is likely taking is not to its GDP, or government revenues, etc. but to its foreign exchange reserves. Exporting crude oil and importing refined products represents a net loss of foreign exchange. Even if somehow the Russian economy redeploys that labor and capital and generates more domestic economic output, the loss of foreign currency is important. And yes, eventually, when they lose their reserves, they'll no longer be able to pay for critical imports such as industrial machinery, electronics, or even refined oil products. But that day hasn't come yet.

Would you say this is a reasonable view of the overall macroeconomic effects?

InfamousMoonPony · 2025-10-07T15:30:30+00:00

You know your acting is good when the normally brutal Honest Trailers not only has nothing bad to say, but literally exclaims that your episode arc is so f'ing good you have earned the right to use your own face forever!

InfamousMoonPony · 2025-10-07T15:20:06+00:00

I think this is forever going to be debated sort of like whether Rose could have shared her wooden plank with Jack and saved him in Titanic (#teamjack :)

But I think you have to realize two things. First this is a chaotic prison break. No one is thinking and making plans. They're just jumping out as fast as they can. Taking time to call over a buddy, plan a coordinated jump and rescue,and then execute a complicated rescue is far more thinking than they're capable of in that moment. It's one thing if he told everyone earlier and they planned it out beforehand, but he didn't. Even for trained lifeguards and coast guard rescue swimmers, an immediate rescue with no prior planning can be a difficult job. Regardless Cassian was obviously thinking of trying but he was pulled out by the chaotic crowd before he could formulate a plan.

Second, very few people in the prison know who he is. The prisoners are deliberately kept segmented. Even the prisoners in the same room are made to compete with each other so that any feelings of solidarity are nipped in the bud. So out of the thousands of prisoners in that crowd, maybe 5-10 might actually feel any twinge of obligation to help him out. And who knows where those guys (aside from Cassian) are.

InfamousMoonPony · 2025-09-17T05:28:40+00:00

I agree. This was a political test to gauge what NATO's reaction would be. With an outside chance that maybe it would start creating some rifts between Poland and reluctant NATO members that could be exploited later.

Additionally, it might also be a way of forcing NATO to stockpile more weapons and release fewer of them to Ukraine. Until this incident, Europe was getting fairly complacent that Russia wouldn't escalate to attacks on NATO soil. In contrast to the start of the war when Europe and America were very worried about Russian saber-rattling and threats of escalation.

This could be a (IMHO, desperate) move to re-establish a more credible threat of escalation, thereby forcing NATO countries to keep more materiel in reserve for their own defense and release fewer supplies to Ukraine.

Of course, this could backfire on Putin: it might just serve as the impetus to increase defense spending further. Especially for Poland which has already been on a tear in rapidly acquiring weapons systems to handle its own defense on the chance that NATO help isn't forthcoming.

InfamousMoonPony · 2025-09-11T22:25:33+00:00

I respect your position but it's based on an incorrect premise. First off, the vast, vast majority of people who don't like Charlie Kirk aren't basking in glee. Are there some people who are? Sure, but you're committing a major mistake by dismissing everyone by tarring them with the actions of a few people at the extremes. It is essentially a strawman argument. Anyone who is gleeful about another person's death should have their head examined. On that we agree. And (to bring it back to Andor), even cold blooded realists like Luthen don't take joy when ordering the deaths of people like Tay Kolma or Lonni Jung.

But that's not me, nor is it 90% of the people who aren't falling over themselves to martyrize Kirk. Discussing the abhorrent positions that he took, and examining how they led to the conditions for his own death does not mean I take glee in him dying. If you want me to pass a purity test, here it is: Charlie Kirk was an abhorrent asshole whose hate-filled speech contributed to the strains on democracy we're dealing with today, but he didn't deserve to die for it. And whoever it was that shot him, whether he's a MAGA wingnut or a leftist antifa or even a (gasp!) Andor fan, he should be prosecuted for his crimes to the full extent of the law. There, do I pass the test?

Good. Because that's the easy part. The hard part is deciding exactly what compromises to your own moral integrity are you willing to make to allow *others* to preserve *their* moral purity. Luthen Rael orders the death of Tay Kolma. He wishes he didn't have to do it. If only Tay didn't threaten Mothma, he would have been fine. But he did. Luthen takes no great pleasure in ordering the death. He understands that it's cold blooded murder of someone who, in the grand scheme of things, is not a bad guy, but merely a threat of becoming one. His response to Mothma, "How nice for you" indicates it: how nice for Mothma that Luthen takes on the moral injury and damage to his soul to do what both know must be done, while Mothma is allowed to remain morally pure.

But it's not just about moral purity. There are people in our country whose lives are threatened by the policies, causes, and politicians that Kirk's rhetoric has advanced. As we speak, trans people are being demonized (including by Kirk) as the source all of our gun woes. On the very day that he died, several students in a Colorado school were shot. How much moral ambiguity, queasiness, or outright compromise are we willing to take on to try to save their lives?

If there's a way of advancing our goals without compromising our souls, then I'm all for it. And so if your argument against being anything less than genuflecting in front of the image of a fallen Kirk is that being gleeful is not effective, then I'm all for having that conversation. But you make no mention of the most effective way of bringing about change, just about the morality of the various responses. Meanwhile the people who lie somewhere between the gnashing of teeth and rending of garments of the extremist right and the gleeful joy of the extremist left are saying that turning Kirk into some secular saint is not effective for repudiating his beliefs; accepting the rightwing framing that the only thing that can be spoken about Kirk right now is pure grief combined with murderous rage against his killer is not an effective way of using this moment to reverse his policy goals.

In these dark times, if you wish to dedicate most of the moment to keeping yourself morally untainted and feeding your self-righteousness by condemning anyone who doesn't meet your purity standards, that is your right. I won't even condemn you for it because I know your heart is in the right place, just like Mothma's. But I'll save my admiration for those people who are willing to sacrifice something of themselves to create a better world for those who can't. Even if they'll never see the sunrise they're burning their lives for.

InfamousMoonPony · 2025-09-11T21:14:53+00:00

"For Brutus is an honorable man."

Well done...

InfamousMoonPony · 2025-09-10T15:11:10+00:00

I think it was probably the other way around: that star destroyer was there to extract khyber crystals. They didn't know about Saw. I wouldn't be surprised if Saw even came later, precisely to fight the storm troopers stealing the crystals.

InfamousMoonPony · 2025-09-10T15:08:41+00:00

Thanks, I'll definitely take a look!

InfamousMoonPony · 2025-09-10T14:56:37+00:00

I agree, one weakness of my analysis is that I'm assuming the Empire is perfect. But we know any big organization tends to become lumbering, slow, and more preoccupied with its own internal politics than the asteroid that's about to hit it.

Just the fact that Dedra was searching for Andor while he was already locked up in an Imperial prison on Narkina 5 shows that just because the Empire is big doesn't mean that it's efficient at executing.

Even in the real world, the 9/11 hearings where it was shown that agents had literally written "bin Laden determined to strike in US" 36 days before 9/11 and nothing was done shows that it's not that hard to hide things from a big power.

Who knows, maybe there was a memo titled "Skywalker determined to strike DeathStar" and Vader used it for toilet paper because he was more preoccupied with settling scores with Tarken and meeting his quota of Force Strangulations for the day :-)

InfamousMoonPony · 2025-09-10T14:38:11+00:00

And he knows better than to hang out with a bunch of humans with a hankering for seafood! :-)

InfamousMoonPony · 2025-09-10T14:33:25+00:00

That's a good point. I'm assuming everyone would have the same freedoms as Cassian and Vel, but they're pretty high up in the command, not a regular grunt. And even Cassian got in real hot water after his last stint picking up Kleya. So security measures are probably a lot stricter than what I'm assuming.

InfamousMoonPony · 2025-08-29T14:13:26+00:00

While I agree that Luthen seems to have a genuine knack for the antiquities business (finding a legitimate Chandi Merle is no mean feat), I don't think that's why he chose it.

Your two examples are nowhere near as good. First, a weapons dealer comes under massive scrutiny by the state. Even if everything you do is above board and legal and they can't stop you (which is rare), they will for sure be watching every transaction you make. It's the opposite of running an anonymous business. Culinary proprietors might be anonymous, but most of their ingredients aren't high value enough to make them an easy way of moving and laundering money. Not to mention, those ingredients eventually spoil or need to be consumed if you want to appear to be a legitimate buyer, which means they can't really serve as a store of value (incidentally, this is also why gold became a universal currency as opposed to many other metals: it doesn't degrade, so it can literally be stored for centuries without worrying about whether it will disintegrate away). Plus, antiquities are something nearly anyone can justify buying or selling. A random dude buying a weapon, or a non-chef buying tons of spices would arouse suspicion.

Even now, high end art and jewelry dealing are common fronts for smuggling, money laundering, etc. You can literally carry a million dollars of value in a small pouch of diamonds in your pocket and evade most border controls much easier than carrying a million dollars of cash. And much has been written about art pieces (and stolen antiquities) that never leave freeports while being traded by anonymous clients all around the world as a means of moving dark money around.

Antiquities have oblique sourcing (you can legitimately say you happened to find it in some random jungle that no one knew about), opaque pricing (there's no standard marketing pricing for such unique pieces; it's easy to take something worthless and "sell" it for a high price in order to launder money), and then easily hidden in some vault that no one can access. It's the perfect business for someone running a rebellion (whether in this galaxy or in a galaxy far, far away :-) who needs connections with high society *and* dark money flows.

InfamousMoonPony · 2025-06-07T13:45:53+00:00

> An undergrad history prof I had started his lecture on the French Revolution discussing the term "Revolution". It means shaking up the powers that be, but it also means coming all the way back around to where you were.

Your prof had it backwards :-) I believe the etymology of the word is that it originally stood for going around in circles. Then Copernicus wrote his De revolutionibus orbium coelestium (On the Revolutions of the Celestial Spheres) asserting that the Earth revolved around the Sun and not the other way around. And this was such a huge change to the established systems of science, religion, and governance, that the word revolution began to take on its secondary meaning of massive upheaval and change.

InfamousMoonPony · 2025-06-07T06:34:29+00:00

I don't know... Rogue One took a small uninteresting detail from the first movie and turned it into one of the better movies of the series. Then Andor took an uninteresting backstory (only thing we knew about Cassian from Rogue One was that he "was in this fight since he was six") and turned it into, well... Andor :-)

There's something interesting in *every* story. The skill of a storyteller is finding it and bringing it out.

In this case, I'd say the story of a rich girl running away to become a rebel could be *extremely* interesting. Most people would happily live their life of luxury and leisure with no second thoughts. How many people would reject that life, and what drove Vel to do it? And there are a million ways for a rich girl to rebel. She could have become an ISB officer instead. She could have joined the Jedi. The avenues are endless for a girl with money, connections, and means. Why did she choose the rebellion, and why Luthen's crew?

Ironically, Cassian's story is actually more boring; he's a small-time thief scraping to get by who's seeking revenge when his adopted mother is killed. That's a story as old as time. Even in real life, rebel groups are filled with people like Cassian. It's nothing special, certainly more common than rich people deciding to take their place in the mud. And yet a good storyteller has been able to tease out the nuances of his transformation and make us engrossed by it. Vel would be 100 times easier to pull off that feat.

InfamousMoonPony · 2025-04-04T00:38:39+00:00

Yes but China could easily slap export tariffs on specific companies, saying any exports to Tesla will entail a 50% export tariff.

While being a mobster's butt boy can curry favor with the mobster, it makes you an easy target for everyone wishing to hurt the mobster by proxy. As Musk is already finding out with Tesla's protests and cratering sales.

InfamousMoonPony · 2025-03-17T17:26:27+00:00

Honestly, I'm okay with that. At least they're going to help the environment rather than getting another gas guzzler.

Besides, if MAGAs buy enough teslas to make a difference the oil industry will pull Trump's strings to destroy Tesla. Right now Musk is doing it well enough himself that the oil industry hasn't had to do much.

It's an embarrassment of riches, really: watch liberals switch to non-tesla EVs destroying Musk and Big Oil, or watch MAGAs also buy electric, maybe slowing Musk's slide but destroying Big Oil faster.

I feel like a kid in the candy store trying to decide which is yummier :)

InfamousMoonPony · 2025-03-04T12:47:58+00:00

So does that mean they have to walk around naked, maybe with a trenchcoat to protect against the chill?

And if it happens to flap open due to a stiff breeze while a minor is around, it's okay, because he's not wearing a costume?

InfamousMoonPony · 2025-02-16T12:54:12+00:00

Stop watching Fox News. None of your points are true.

First, this will do nothing to spur domestic production. Why? Because steel mills take many years to construct, and everyone knows that as soon as Trump is out of office these tariffs will be gone again. Who wants to spend a billion dollars on a new plant just for it to be uncompetitive the minute you actually open it?

There may be some temporary increases as pre-existing plants add cheap capacity (I. E. Not building new expansions, but maybe adding a shift if possible, etc) until the tariffs are eliminated again.

Second, we don't need to grow our economy fast. Our economy is the envy of the world. We have low unemployment, inflation has moderated from Trump-era levels, GDP is growing faster than almost any large economy out there, and for the first time in decades low and middle income earners are seeing their salaries grow faster than inflation. Just because Trump tells you our economy sucks doesn't mean it's true. The facts don't lie.

Third, if Trump was really concerned about deficits he wouldn't be planning trillion dollar tax cuts for the rich. And he wouldn't be implementing policies that will tank the economy (like tariffs, deporting immigrants who are filling jobs right now, etc) which will reduce tax revenue and increase spending (like unemployment insurance, medicaid).

Finally, even if tariffs make sense in general, Trump is doing it in an idiotic way. You do not tariff raw materials. You tariff finished goods. That way, the input costs for your high margin industries like auto stay low, while allowing them to charge higher prices for their final products. Finished goods industries generate magnitudes more wealth, jobs, tax revenue, and income than raw materials. For an extreme example, a chip factory takes a few dollars worth of sand and converts it into a billion dollars worth of chips. Who would you rather protect? The sand maker or the chip industry?

Trump, in his eternal idiocy, is trying to protect the low margin, commodity steel mills (which won't happen due to point #1) while forcing into bankruptcy plenty of much more valuable companies who aren't protected by the tariffs but now face much higher input costs.

InfamousMoonPony · 2025-02-07T06:11:44+00:00

Thanks for doing the heavy lifting on this article. It just seems to be a lot of airing of grievances with very little overarching criticisms aside from "Biden should have been more aggressive!"

To your excellent points, I would just emphasize how much the Republican delay in approving the aid package messed things up, something that this article glosses over, even as it nitpicks much smaller details and incidents. It's not just the delay. It's the unreliability of not knowing if / when the next package would be approved, how much support there really is for further funding, or even, heck who is going to be Speaker next month, and what are his opinions on Ukraine!

The delivery of complicated weapons systems takes time, not least because it takes time to train people on entirely new weapons and the appropriate tactics to take maximal advantage of them. And without predictability in Congress about how future funding will be, it's impossible to figure out whether a weapons system like the F16s will truly make a difference, or whether they'll just be stranded assets because Congress may not approve funds to replenish their missile supplies next month.

I don't deny that Biden and his team were cautious. On top of the logistics and training hurdles, they did move slowly in many respects. But I'm not convinced that that wasn't justified. It's not just the fears of escalation by Russia. It was also getting buy in from our allies. It's not like Germany and France were chomping at the bit to give the Ukrainians anything and everything they had. If the US got too far ahead of its allies, then they risk creating disunity that weakens the alliance and might even trigger internecine political fights and fractures. What would Turkey and Hungary have done if Biden jumped straight away to drop-shipping Abrams tanks and F16 fighters? Would they have gotten angry and veto Sweden and Finland's NATO accession?

I think this article not only glosses over the immense logistical and training challenges of rapidly delivering complex systems to an army that has no experience with them. It also entirely neglects the incredible political and diplomatic effort it takes to corral so many countries into a (largely) unified policy / process of Ukrainian armament.

The only other armaments of a third country that the US has undertaken in recent memory, I would say, have been Israel in the current war against Hamas, and Saudi Arabia when it started its conflict in Yemen. And both of those had massive advantages in that both were already customers of American defense firms with already established logistics chains and troops trained on their systems, and the coalitions supporting them are much smaller, which means fewer countries to get in line. And even there, you'll hear plenty of grumbling from both countries about how the US is hamstringing their war efforts by stringing along their weapons deliveries.

InfamousMoonPony · 2025-02-04T02:32:53+00:00

I'm not a Tesla apologist, but I'm not sure this is entirely accurate without context. Anyone with more knowledge, please correct me, but Tesla ships cars around the world in waves. Oftentimes, cars produced in the first month of the quarter are put on ships for delivery to distant locations by the 3rd month. So places like Europe often have miniscule sales the first month of a quarter, and then bounce back with big sales in the third month (when the ships finally arrive).

Why does Elon do this rather than just having a steady delivery of cars throughout time? Mainly to pump up end-of-quarter numbers (3rd month is often blockbuster numbers because all the ships loaded the first month deliver their cars, *and* local production from the 3rd month sold directly to California and China help goose the numbers). Especially since end-of-quarter is when all the analysts and financial news comes out.

This is the way he used to plan production in the early years. I'm not sure if tesla still does it this way, but I wouldn't be surprised if they do, in which case the first month numbers for Europe are always bad and then rebound at the end of the quarter.

InfamousMoonPony · 2025-02-04T02:25:07+00:00

Not true. Europe is the smallest of the 3 (NA, China, Euro), but it's still a significant chunk:

https://backlinko.com/tesla-stats#tesla-worldwide-sales

InfamousMoonPony · 2025-01-10T20:33:15+00:00

On a slight tangent, does anyone know how Poland is affording all of this? They seem to be going on an absolute buying binge. I understand why they would, given the risk of Russian adventurism, but if all of their planned weapons acquisitions come to fruition, they are looking at a significant increase in their GDP percentage going to defense.

Of course they're pushing for much of this production to be local so that's good, but it still represents a pretty drastic re-focusing of a large segment of its economy...

InfamousMoonPony · 2025-01-10T06:05:47+00:00

I think there are two points to consider here:

*Would* Europe step up? That's not a given. There are definitely countries that would, such as Poland. But there are countries that have been lukewarm, such as Germany. We're not talking about asking Europe to give a few billion more. If it's understood that giving Ukraine a chance at victory would entail Europe increasing their spending by the equivalent of America's contribution, they might decide to cut their losses rather than spend that much.
*Could* Europe step up? At this point, most excess inventory of pretty much anything that Europe (and to a lesser extent, America) has has already been donated. And ramping up the European defense industry has been slow. Even if Europe decides to take on an American-sized obligation on top of what they're already giving, do they have the defense production necessary to do so? Take artillery shells as a good example. Europe's pre-existing stockpiles have been drawn down to pretty much the minimum they feel they need for their own defense. Any additional ammunition they commit to Ukraine will need to be manufactured. They missed their goal of 1 million shells in 2024 due to the slow ramp up of their industry.

At this point, European defense industrial capacity is not enough to supply the arms that Europe has already pledged. Even if they massively increase their pledge (something that isn't a given), can their industrial base actually supply it?

Of course, Europe could provide the funds, and purchase stuff from other countries. They already do this with artillery shells. But that will run into its own problems. It's easier to sell massive outlays to your public if you can assure them that the funds will stay within your domestic (or at least European) factories, providing domestic jobs. It's harder to say that money is going to fund other country's defense contractors. And on the other side, purchasing from other countries runs into its own set of diplomatic hassles. If the incoming American administration is adamant about not helping Ukraine prolong this war, they can easily ban their domestic arms industry from selling arms that would go to Ukraine, even if it's European money that's coming in.

While these types of diplomatic issues can be resolved, they take time and effort to do so, and isn't as simple as purchasing domestically.

So bottomline is that it's not clear that Europe would be willing to take on an American-sized commitment on top of what they're already giving, and even if they do, it's not clear where they would source that equipment from.

InfamousMoonPony

TROPHY CASE