Jun 7th 2022, 0:07:19
This discussion started in another thread on another forum and shouldn't go on there, but I felt inclined to make a short response to this anxious post and try to steel my ally's(irl not in game) nerves for a bit. I failed at the short part. :P
You really think that? I don't, i tend to not underestimate my counter parts, i think Russia are quite content with what's happening around the world, their invasion has destabilized the entire world's economy sending the West in particular into a tail spin and complete panic, nah i don't think Russia wasn't prepped, this was a calculated attack, hundreds of millions of dollars are pouring in from the West oil purchases of Russian oil and the Kremlin knows that they have the upper hand, Putin is laughing his ass off watching the West depleting their arsenal by sending weapons to Ukraine, we are witnessing a chess match at a global scale and Russia is kicking our ass with pawns.....
This is very disturbing to watch :-(
1981, remember this number for a while. I'll get back to it later.
On the impact of the Russian invasion of Ukraine so far in 3 aspects relating to your economy:
1. NATURAL GAS:
The US is a net natural gas exporter mostly through LNG, and the war jacked up the price, and therefore the value of that natural gas by a factor 2-3. Yes, you might say that American consumers also get higher electricity prices and natural gas prices because of this, but the income goes to American companies that get taxed in the USA and are owned by American investors, including pension funds.
Quick mental maths based on a quick glance at the henry hub spot prices plus googling the US Natural gas production suggests the added value, assuming no extra production(which there will be), will be on the order of $200 billion extra this year which will trickle down to salaries in gas production, drilling/fracking/prospecting companies, service companies, liquefaction /LNG tanker companies, etc etc, and to taxes, pension funds, individual investors, mutual fund investors etc.
Further down the line US and EU signed a long term deal that US delivers LNG to EU for many years to come, which EU is bound to even if the war ends and Russia somehow becomes a reliable partner again. The EU does this for energy security but for the US it's extremely profitable.
EU has further raised the LNG tanker rates globally(which are mostly operated by american companies) and the LNG spot prices such that China, when they come out of lockdowns fully, they will not be able to compete for spot LNG with developed economies like EU, Japan and South Korea because these make far more GDP per energy input (China is far less energy efficient). So for every kWh of natural gas input EU/Japan makes about twice the value of products/services compared to China. Even the USA and India are better than China and therefore China suffers worst of all the major players by higher energy prices, which are globally inflated everywhere now. China also suffers because they are the largest energy importer of all major players.
What China will likely try to do is sign 20-30 year deals for LNG deliveries at the absolute worst times for a buyer to negotiate a price.
----
2. OIL:
One of the more hilarious things Americans voice is concern over gasoline prices. The constant whining over this sounds really silly in a place where we pay significantly more than Californians, and twice that of the rest of the US's pump prices. Further, you make two thirds of your oil, and import most of the rest from your two neighbours. The EU and China are not that lucky. China makes about a third of their own oil, and the EU makes about 5% of their oil.
The EU has a good neighbour in Norway and a bad one in Russia which we desperately try to replace right now, which is impossible in the short term. This is beyond problematic from a security, strategic, diplomatic and economical perspective. All of the EU isn't completely screwed, but central Europe very much is dependent on this trade. I'm not talking economical terms, I’m talking survival terms. There are no alternative routes to supplying these nations with oil and gas and European winters are cold.
Currently American refiners are replacing Russian Diesel on the European market at unheard of margins. Again the EU needs this badly so we are paying very handsomely for it. Not sure this situation is sustainable for long, but you are making billions from these exports currently. It's hard to get a full grasp of the absolute numbers for this and if it will last days or years.
----
3. WEAPONS:
The US is a net exporter of weapons. The war finally made Europe decide to spend 2% of GDP on weapons. This is a huge win for the USA which has been pushing for this for a long time. On top of that many of the weapons Europe will buy will be American made, sold at great profit. Germany will likely buy the F35, Poland may buy F15 or F16 and have already committed to buy M1A1s, several european nations are sending their old soviet era equipment to Ukraine and replacing with american counterparts, etc etc. Also ofc Ukraine is getting tons of weapons paid for by US taxpayers and you might compare the cost of these to the profits elsewhere. Such a simplistic analysis will still result in a profit to America as a whole, albeit spread mainly over people working in/owning the defence industry, or the oil and gas industries. Added inflation and increasing rate hikes will likely cost more than the benefits for most of the rest in pure money terms. This ignores vital aspects though.
Militarily, Russia is still well beyond China(whose military is to a large part made up by russian technology), and those weapons you are sending is de-militarizing your greatest military adversary, cheaply. The weapons are also getting tested in real combat versus this adversary, which will help you keep and grow the gap to them. It seems like the US isn't sending their all. US Armed forces have sent a lot of stuff from their storage so they can renew them, which increases your combat readiness. Some of these weapons would have had to be dismantled in a few years because of old age(old fuzes, explosives and chips will malfunction), now they are giving you goodwill and dismantling your enemy's equipment.
Remember that every tank Ukraine's Armed Forces destroy is one less you have to match in Eastern Europe to help defend your allies for years to come.
Stingers for instance are decades old technology, not part of your military doctrine and has been used to destroy Russia's best helicopters and fighter planes to the point they don't dare to fly them over Ukraine most of the time. You can send 100% of your stingers and it will not lower your military's capability in any way. They are meaningless to you.
If you take a step further out and think about it this way; these costs are pretty benign for the US compared to say the Iraq war or the Afghanistan war, the manhattan project or the moon landing. Yet you are sending a limited supply of a portion of your capability, putting it in the hands of people who a few weeks ago had no experience or training with them, and they are blowing the Russian military to shreds.
Early on in the war Ukrainian sources gave a journalist statistics on their use of the American Javelin Anti Tank Guided Missile, 93% of the times it had been fired in anger, it had led to a kill of the tank it was fired upon. Even this missile isn't a core resource to the US arsenal, it is an 1990s afterthought; "yeah well I guess we could kill a tank like this as well, if we ever need to".
No one in their right mind thinks Russia is a match for the US military anymore.
This is american exceptionalism at display in front of the entire world;
*It's way cheaper than the Manhattan project, and gives more goodwill than nuking Hiroshima/Nagasaki.
*It's way cheaper than the Moon landings, but it does the same thing; it displays with utmost clarity that you are technologically and militarily obscenely superior to your enemies.
*Ditto for the Iraq war. While you then displayed your cartoonishly overpowered military capabilities it ended up costing trillions $, lives and international goodwill.
*This aid to Ukraine costs no American lives, is cheap, while still displaying your technological and military superiority extremely pedagogically.
This is American exceptionalism on display in front of the entire world, in a positive way, such as we have not seen for half a century. Star-sprangled awesome.
Originally posted by KoHeartsGPA:
You really think that? I don't, i tend to not underestimate my counter parts, i think Russia are quite content with what's happening around the world, their invasion has destabilized the entire world's economy sending the West in particular into a tail spin and complete panic, nah i don't think Russia wasn't prepped, this was a calculated attack, hundreds of millions of dollars are pouring in from the West oil purchases of Russian oil and the Kremlin knows that they have the upper hand, Putin is laughing his ass off watching the West depleting their arsenal by sending weapons to Ukraine, we are witnessing a chess match at a global scale and Russia is kicking our ass with pawns.....
This is very disturbing to watch :-(
1981, remember this number for a while. I'll get back to it later.
On the impact of the Russian invasion of Ukraine so far in 3 aspects relating to your economy:
1. NATURAL GAS:
The US is a net natural gas exporter mostly through LNG, and the war jacked up the price, and therefore the value of that natural gas by a factor 2-3. Yes, you might say that American consumers also get higher electricity prices and natural gas prices because of this, but the income goes to American companies that get taxed in the USA and are owned by American investors, including pension funds.
Quick mental maths based on a quick glance at the henry hub spot prices plus googling the US Natural gas production suggests the added value, assuming no extra production(which there will be), will be on the order of $200 billion extra this year which will trickle down to salaries in gas production, drilling/fracking/prospecting companies, service companies, liquefaction /LNG tanker companies, etc etc, and to taxes, pension funds, individual investors, mutual fund investors etc.
Further down the line US and EU signed a long term deal that US delivers LNG to EU for many years to come, which EU is bound to even if the war ends and Russia somehow becomes a reliable partner again. The EU does this for energy security but for the US it's extremely profitable.
EU has further raised the LNG tanker rates globally(which are mostly operated by american companies) and the LNG spot prices such that China, when they come out of lockdowns fully, they will not be able to compete for spot LNG with developed economies like EU, Japan and South Korea because these make far more GDP per energy input (China is far less energy efficient). So for every kWh of natural gas input EU/Japan makes about twice the value of products/services compared to China. Even the USA and India are better than China and therefore China suffers worst of all the major players by higher energy prices, which are globally inflated everywhere now. China also suffers because they are the largest energy importer of all major players.
What China will likely try to do is sign 20-30 year deals for LNG deliveries at the absolute worst times for a buyer to negotiate a price.
----
2. OIL:
One of the more hilarious things Americans voice is concern over gasoline prices. The constant whining over this sounds really silly in a place where we pay significantly more than Californians, and twice that of the rest of the US's pump prices. Further, you make two thirds of your oil, and import most of the rest from your two neighbours. The EU and China are not that lucky. China makes about a third of their own oil, and the EU makes about 5% of their oil.
The EU has a good neighbour in Norway and a bad one in Russia which we desperately try to replace right now, which is impossible in the short term. This is beyond problematic from a security, strategic, diplomatic and economical perspective. All of the EU isn't completely screwed, but central Europe very much is dependent on this trade. I'm not talking economical terms, I’m talking survival terms. There are no alternative routes to supplying these nations with oil and gas and European winters are cold.
Currently American refiners are replacing Russian Diesel on the European market at unheard of margins. Again the EU needs this badly so we are paying very handsomely for it. Not sure this situation is sustainable for long, but you are making billions from these exports currently. It's hard to get a full grasp of the absolute numbers for this and if it will last days or years.
----
3. WEAPONS:
The US is a net exporter of weapons. The war finally made Europe decide to spend 2% of GDP on weapons. This is a huge win for the USA which has been pushing for this for a long time. On top of that many of the weapons Europe will buy will be American made, sold at great profit. Germany will likely buy the F35, Poland may buy F15 or F16 and have already committed to buy M1A1s, several european nations are sending their old soviet era equipment to Ukraine and replacing with american counterparts, etc etc. Also ofc Ukraine is getting tons of weapons paid for by US taxpayers and you might compare the cost of these to the profits elsewhere. Such a simplistic analysis will still result in a profit to America as a whole, albeit spread mainly over people working in/owning the defence industry, or the oil and gas industries. Added inflation and increasing rate hikes will likely cost more than the benefits for most of the rest in pure money terms. This ignores vital aspects though.
Militarily, Russia is still well beyond China(whose military is to a large part made up by russian technology), and those weapons you are sending is de-militarizing your greatest military adversary, cheaply. The weapons are also getting tested in real combat versus this adversary, which will help you keep and grow the gap to them. It seems like the US isn't sending their all. US Armed forces have sent a lot of stuff from their storage so they can renew them, which increases your combat readiness. Some of these weapons would have had to be dismantled in a few years because of old age(old fuzes, explosives and chips will malfunction), now they are giving you goodwill and dismantling your enemy's equipment.
Remember that every tank Ukraine's Armed Forces destroy is one less you have to match in Eastern Europe to help defend your allies for years to come.
Stingers for instance are decades old technology, not part of your military doctrine and has been used to destroy Russia's best helicopters and fighter planes to the point they don't dare to fly them over Ukraine most of the time. You can send 100% of your stingers and it will not lower your military's capability in any way. They are meaningless to you.
If you take a step further out and think about it this way; these costs are pretty benign for the US compared to say the Iraq war or the Afghanistan war, the manhattan project or the moon landing. Yet you are sending a limited supply of a portion of your capability, putting it in the hands of people who a few weeks ago had no experience or training with them, and they are blowing the Russian military to shreds.
Early on in the war Ukrainian sources gave a journalist statistics on their use of the American Javelin Anti Tank Guided Missile, 93% of the times it had been fired in anger, it had led to a kill of the tank it was fired upon. Even this missile isn't a core resource to the US arsenal, it is an 1990s afterthought; "yeah well I guess we could kill a tank like this as well, if we ever need to".
No one in their right mind thinks Russia is a match for the US military anymore.
This is american exceptionalism at display in front of the entire world;
*It's way cheaper than the Manhattan project, and gives more goodwill than nuking Hiroshima/Nagasaki.
*It's way cheaper than the Moon landings, but it does the same thing; it displays with utmost clarity that you are technologically and militarily obscenely superior to your enemies.
*Ditto for the Iraq war. While you then displayed your cartoonishly overpowered military capabilities it ended up costing trillions $, lives and international goodwill.
*This aid to Ukraine costs no American lives, is cheap, while still displaying your technological and military superiority extremely pedagogically.
This is American exceptionalism on display in front of the entire world, in a positive way, such as we have not seen for half a century. Star-sprangled awesome.
Edited By: Gerdler on Jun 7th 2022, 0:51:55
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