What does "if A then B" have to do with the very basic fact I questioned what you meant when you wrote "“Oil price falling by a factor of 2" and pointed out to you oil prices have fallen by more than 80%. It's basic math. It isn't a matter of "if A, then B".
If you don't understand even this, I'm sorry for you.
But, ok, for the stupid: Find the difference between saying "If the oil price is falling by a factor 2 you can buy 2 times less for your oil", which is what I have actually said, and
“Oil price falling by a factor of 2", what you claim I have said.
Dreams about further falling oil prices (actually they even rise) and about US oil as a game changer deleted. You would better care about how the US oil producers survive the low oil price.
http://phx.corporate-ir.net/phoenix.zhtml?c=79687&p=irol-rigcountsoverview suggests that the rig count is seriously going down, now being 619, down -924 in comparison with last year.
Supply doesn't decline just because prices fall.
Of course, once the rig is working and the oil comes out, one will not stop this because of a lower price. But nobody invests into new rigs, so with some delay in time the supply goes down.
Two, the world isn't in an economic downturn.
Not yet, but there seem to be a lot of indicators that this has to be expected. If this does not happen, fine. But if it happens, then the prices of all raw materials tend to go down.
And then, of course, oil would remain down or even go further down during the whole crisis time.
New technologies are now emerging which greatly reduce the need for oil (e.g. electric cars and battery technologies). China has recently signed onto a deal to promote cleaner energy. Other major oil producers have been long aware this day was coming and have diversified their economies. Mother Russia has not and is now behind the 8 ball.
Electric cars seem quite stupid, first one creates electric energy, when one has to store it in batteries, when one has to travel them around - a lot of loss in each step, instead on a single loss burning gasoline. Such stupidity survives only based on state support. It is, of course, very good for mankind in the long range if one can get rid of the much too big dependence on oil. But this in no way means that oil producers become poor guys. And you fantasies that Russia has changed nothing remains propaganda nonsense. It exports now grains, weapons, atomic power, even software, and has also shifted toward selling oil products instead of oil itself. Saudi Arabia seems in much bigger financial trouble.
The United States had a positive balance of trade too, just before it fell into The Great Depression. A positive balance of trade is no protection from inflation...oops.
The point being? A positive trade balance means the land, as a whole, gains from foreign trade, gets more money from export than it has to pay for imports. If the price for the main export product falls a lot, one would expect that this changes. It hasn't.
And Russia's foreign currency reserves have been used for than paying down debts. It has been used to prop up the ruble.
A little bit, when it was very much down. Later, during the last year, there was even a time when they have sold rubles. What one has to do to make profit - to buy rubles when they are very cheap, to sell them when they are worth more.
The reserves have been reduced, by 27,1%, to \$371,3 billion. But similarly the things one has to care about have been reduced too, and even more. One criterion for sufficiency of reserves is if they are sufficient for 3 months of import. This criterion has been reduced by 33,6% to \$78,0 bill. Another one is the amount of foreign debt which has to be paid next year. Reduced by 42,8%, to \$134,1 bill.
http://aftershock.news/?q=node/368568 for the numbers.
Russia's economy has contracted by 5% or more and it has double digit inflation and people on the street protesting because they are not getting paid.
Nice to see that it makes you happy if some people are not getting paid. So, don't worry, you will always have a good chance to become happy, because it always happens that some people do not get paid because their firms have problems and go bankrupt, and the Western press will always find them, once one can make propaganda with this. Of course, if there is some crisis, there will be even more such cases. So, nice times for you. If the big world crisis comes, it will hit Russia too, even if it is prepared quite nicely for this, because it depends now much less on the rest of the world than two years ago.
