O.K. I will try to stick to the OP's wishes and limit this strictly to economic theory.
I am surprised that no one has mentioned that when your own currency decreases in value, foreign currency proportionately increases in value. It then becomes costly to import items, but more profitable to export items. This means that the Russians will have a harder time paying for their own scientific and military launches, but at the same time every engine and launch service sold to someone else is worth more and more as the ruble drops. This means they will likely be reticent to restrict sales of RD-180s and seats on Soyuz.
think you need to do a reverse on that thinking. If product xyz is contracted in us dollars for 1$, and it buys 60% more for that same dollar. The buyer could buy 60% more stuff for the same (1$) amount of money spent.
O.K. I will try to stick to the OP's wishes and limit this strictly to economic theory.
I am surprised that no one has mentioned that when your own currency decreases in value, foreign currency proportionately increases in value. It then becomes costly to import items, but more profitable to export items. This means that the Russians will have a harder time paying for their own scientific and military launches, but at the same time every engine and launch service sold to someone else is worth more and more as the ruble drops. This means they will likely be reticent to restrict sales of RD-180s and seats on Soyuz.
think you need to do a reverse on that thinking. If product xyz is contracted in us dollars for 1$, and it buys 60% more for that same dollar. The buyer could buy 60% more stuff for the same (1$) amount of money spent.
No, the opposite. If the product is contracted in dollars, spending $1 will get you the same as the day the contract was signed. The company selling it to you gets a windfall (much higher profits).
For it to work the way you said, it would have to be contracted in Roubles. Then the buyer gets any advantage of a fall in the rouble (but loses when the rouble goes up).
cheers, Martin
BTW, the Sea Launch contract with NPO Energomash was done in Ukrainian Rubles
BTW, the Sea Launch contract with NPO Energomash was done in Ukrainian Rubles
Currency name is https://en.wikipedia.org/wiki/Ukrainian_hryvnia
O.K. I will try to stick to the OP's wishes and limit this strictly to economic theory.
I am surprised that no one has mentioned that when your own currency decreases in value, foreign currency proportionately increases in value. It then becomes costly to import items, but more profitable to export items. This means that the Russians will have a harder time paying for their own scientific and military launches, but at the same time every engine and launch service sold to someone else is worth more and more as the ruble drops. This means they will likely be reticent to restrict sales of RD-180s and seats on Soyuz.
think you need to do a reverse on that thinking. If product xyz is contracted in us dollars for 1$, and it buys 60% more for that same dollar. The buyer could buy 60% more stuff for the same (1$) amount of money spent.
No, the opposite. If the product is contracted in dollars, spending $1 will get you the same as the day the contract was signed. The company selling it to you gets a windfall (much higher profits).
For it to work the way you said, it would have to be contracted in Roubles. Then the buyer gets any advantage of a fall in the rouble (but loses when the rouble goes up).
cheers, MartinBTW, the Sea Launch contract with NPO Energomash was done in Ukrainian Rubles, thus, they ended up having to sell significantly under cost. And the relative weakness of the USD during the 2005 onwards has not helped them either. Now they might have a good year.
but this thread made me laugh several times. After the industry survived what it survived after ussr collapse, an fx rate jump is not going to kill it. Only together with the rest of Russia that is.
Any sane large business expecting income and expense in different currencies will buy insurance against exchange rates going up/down in the form of appropriate market instruments (fx options).
the russian industry will substitute imported technologies with domestic ones
After the industry survived what it survived after ussr collapse, an fx rate jump is not going to kill it.
BTW, the Sea Launch contract with NPO Energomash was done in Ukrainian Rubles, thus, they ended up having to sell significantly under cost. And the relative weakness of the USD during the 2005 onwards has not helped them either. Now they might have a good year.Any sane large business expecting income and expense in different currencies will buy insurance against exchange rates going up/down in the form of appropriate market instruments (fx options).
So they sold significantly under cost but compensated that by executing their fx options.
RD-180 sale almost bankrupted Energomash - the lion share of profits went to a third party who actually fixed prices on US market. With floating prices of currencies at certain stage manufacturer have been forced to sell engines BELOW production cost (!) Orbital tried to obtain them, hit a wall with exclusive deal between middle man and ULA, try to challenge them in US court and finally ordered a custom version of engines directly from manufacturer. Without hostile takeover by RSC ENERGIA Energomash would be in difficult financial situation. In ironic twist of fate current president of Energia V.Solntsev is a former head of Energomash. He fooled footsteps of Valentin Glushko - a founder of Energomash who became a head of Energia in 1974.
O.K. I will try to stick to the OP's wishes and limit this strictly to economic theory.
I am surprised that no one has mentioned that when your own currency decreases in value, foreign currency proportionately increases in value. It then becomes costly to import items, but more profitable to export items. This means that the Russians will have a harder time paying for their own scientific and military launches, but at the same time every engine and launch service sold to someone else is worth more and more as the ruble drops. This means they will likely be reticent to restrict sales of RD-180s and seats on Soyuz.
think you need to do a reverse on that thinking. If product xyz is contracted in us dollars for 1$, and it buys 60% more for that same dollar. The buyer could buy 60% more stuff for the same (1$) amount of money spent.
No, the opposite. If the product is contracted in dollars, spending $1 will get you the same as the day the contract was signed. The company selling it to you gets a windfall (much higher profits).
For it to work the way you said, it would have to be contracted in Roubles. Then the buyer gets any advantage of a fall in the rouble (but loses when the rouble goes up).
cheers, MartinBTW, the Sea Launch contract with NPO Energomash was done in Ukrainian Rubles, thus, they ended up having to sell significantly under cost. And the relative weakness of the USD during the 2005 onwards has not helped them either. Now they might have a good year.

Now some political text, moderators are free to delete after this line.
Russian foreign "partners" would prefer "free and democratic" rulers like gorbatchev and eltsin. It would be so cool if research centers got zero money again, factories turned into shopping centers with modern equipment sold as a scrap, scientist moved to usa and europe or had to sell chinese clothes at local markets, army got no new weapons or fuel for training for decade, nuclear submarines cut to pieces, stockpiles of strategic metals just disappear, parts of country declare independence and leave, civil airplane industry bought and killed... Just several examples that came to my mind.
With Ukraine entering NATO now...
O.K. I will try to stick to the OP's wishes and limit this strictly to economic theory.
I am surprised that no one has mentioned that when your own currency decreases in value, foreign currency proportionately increases in value. It then becomes costly to import items, but more profitable to export items. This means that the Russians will have a harder time paying for their own scientific and military launches, but at the same time every engine and launch service sold to someone else is worth more and more as the ruble drops. This means they will likely be reticent to restrict sales of RD-180s and seats on Soyuz.
think you need to do a reverse on that thinking. If product xyz is contracted in us dollars for 1$, and it buys 60% more for that same dollar. The buyer could buy 60% more stuff for the same (1$) amount of money spent.
No, the opposite. If the product is contracted in dollars, spending $1 will get you the same as the day the contract was signed. The company selling it to you gets a windfall (much higher profits).
For it to work the way you said, it would have to be contracted in Roubles. Then the buyer gets any advantage of a fall in the rouble (but loses when the rouble goes up).
cheers, MartinBTW, the Sea Launch contract with NPO Energomash was done in Ukrainian Rubles, thus, they ended up having to sell significantly under cost. And the relative weakness of the USD during the 2005 onwards has not helped them either. Now they might have a good year.Any sane large business expecting income and expense in different currencies will buy insurance against exchange rates going up/down in the form of appropriate market instruments (fx options).
So they sold significantly under cost but compensated that by executing their fx options.
Anyway, with all that sanctions the russian industry will substitute imported technologies with domestic ones, becoming less dependent on fx rates. Russian aerospace will do just fine, at least under "authoritative" rule.
Now some political text, moderators are free to delete after this line.
Russian foreign "partners" would prefer "free and democratic" rulers like gorbatchev and eltsin. It would be so cool if research centers got zero money again, factories turned into shopping centers with modern equipment sold as a scrap, scientist moved to usa and europe or had to sell chinese clothes at local markets, army got no new weapons or fuel for training for decade, nuclear submarines cut to pieces, stockpiles of strategic metals just disappear, parts of country declare independence and leave, civil airplane industry bought and killed... Just several examples that came to my mind.
Not that now everything is so rosybut this thread made me laugh several times. After the industry survived what it survived after ussr collapse, an fx rate jump is not going to kill it. Only together with the rest of Russia that is.
BTW Seeing people on aerospace forum seriously using words like "authoritative" is just fun. Anyone smart enough to discuss aerospace should understand what those terms mean in context of USA foreign (and increasingly domestic) policy. Will not elaborate for risk of being freely and democratically banned.
What you are describing is what the west had to go through post “Space Race” and “Cold War”. My family was part of those times and had all the overtime work they wanted and were subject to layoffs and career changes or starting new businesses. Why should it be any different for Russians? The nation has many bright people and is more than capable of doing great things like innovation and producing new consumer products that the world wants to buy at the right price. You need to begin to produce quality automobiles and aircraft for export just like rockets are in demand for commercial launches and not just weapon systems and expect a job for life...
That is a little harsh, Russia is making those changes, just look at the Sukhoi Super Jet SS-100, this new Russian jet by all accounts is an excellent plane that since entry into service has had an excellent dispatch reliability (unlike say another new Boeing Jet), and speaking of Boeing they have a design center in Moscow and several critical titanium parts on the 787 are currently sourced from Russia. People are buying, and with energy Russia has much to offer.
What you are describing is what the west had to go through post “Space Race” and “Cold War”. My family was part of those times and had all the overtime work they wanted and were subject to layoffs and career changes or starting new businesses. Why should it be any different for Russians? The nation has many bright people and is more than capable of doing great things like innovation and producing new consumer products that the world wants to buy at the right price. You need to begin to produce quality automobiles and aircraft for export just like rockets are in demand for commercial launches and not just weapon systems and expect a job for life...
That is a little harsh, Russia is making those changes, just look at the Sukhoi Super Jet SS-100, this new Russian jet by all accounts is an excellent plane that since entry into service has had an excellent dispatch reliability (unlike say another new Boeing Jet), and speaking of Boeing they have a design center in Moscow and several critical titanium parts on the 787 are currently sourced from Russia. People are buying, and with energy Russia has much to offer.
Have a long drawn out line of thinking but I'm reluctant to post it.
A something new has been added to events. Russia is planning/doing movement of Russian launchers (missiles) equipped with nuke payloads into Ukraine. This IMHO becomes a Arch Duke event (WWI). Talk about the 10,000 Russian "volunteers" located in Domblass Ukraine ends. This event scraps many agreements. UK & USA automatically ACT, NATO is called upon.
Stakes can be much higher depending on the answer to this question.....
A splinter group out of the KGB (I've forgotten the Russian name). In western terms they are Rouge KGB fanatical. Was Mr. Putin part of this group?