Russia raises key interest rate to 17% amid rouble decline

[VegasVic]

<script type='text/javascript'>window.mod_pagespeed_start = Number(new Date());</script>

What happens if Russia (and China) start dumping US Treasury's on the open market?

If they bought them at 50 and sell them at 100 they would lose half of the money in the Russian Treasury. Did they hire a Thai finance minister?

A Russian dump would be material, but not catastrophic. A Chinese dump would be catastrophic. A Russian + Chinese dump would be essentially "game over" for the petrodollar.

When will a Russian "dump" of the USD$ in forex reserves occur....when will a CCP "dump" of the their forex reserves of the USD$ occur......

This wishful thinking continues in its complete disconnect from reality because the answer is never.

The reality is that if Russia "dumped" USD$ forex reserves they would have inflation on the Wiemar scale and the same is true of the CCP Boyz in Beijing. The Bricks only alternative would be to resort to a gold standard which would fail because others would not join...who wants to join an economy acting out of frantic desperation...

The post is more of the fantasy of what theoretically Putin could do but won't ever do. The fact in reality is that neither Putin nor the Boyz in Beijing can do any such thing. It would be financial and economic suicide because in the end the world markets would have to return and resort to the USD$.

Russia is not so much a national economy as it is in fact an oil exporting business, run by oligarchs. The CCP's market socialism with Chinese characteristics is exactly that and it too is on a straight and rapid line to the crapper.

There's no 'when' nor is there an 'if.'

Period.

I've got more bad news for Vlad, I talked to an old Chicago buddy of mine who works at the BOT today and the feeling in the pits is that oil is headed lower and it could remain there for quite a while Given that the Russians have a production cost of around $65/bbl it looks like they had better start selling their gold reserves and pray that they have a bumper grain crop next year

[Asiantravel]

and so it goes by grand design the world's biggest economy to the rescue

Russia may seek China help to deal with crisis

Is 'isolated' Russia about to be bailed out by the world's largest economy China?

http://www.scmp.com/business/banking-finance/article/1664567/russia-may-seek-china-help-deal-crisis

Edited December 18, 2014 by Asiantravel

[Credo]

and so it goes by grand design the world's biggest economy to the rescue

Russia may seek China help to deal with crisis

Is 'isolated' Russia about to be bailed out by the world's largest economy China?

http://www.scmp.com/business/banking-finance/article/1664567/russia-may-seek-china-help-deal-crisis

One would hope so. It's a match made in heaven.

[Credo]

They could probably get a good deal on selling Snowden to the US.

[DrTuner]

Russia and China, the two expansionist empires trying to shake hands. Only one outcome, highlander style.

[Morch]

and so it goes by grand design the world's biggest economy to the rescue

Russia may seek China help to deal with crisis

Is 'isolated' Russia about to be bailed out by the world's largest economy China?

http://www.scmp.com/business/banking-finance/article/1664567/russia-may-seek-china-help-deal-crisis

IF this becomes a reality, and so far it is mere speculation - then unless mistaken, the relevant sum is around $25 billion USD.

How long would that last? How much would it hurt the Chinese economy?

[Asiantravel]

and so it goes by grand design the world's biggest economy to the rescue

Russia may seek China help to deal with crisis

Is 'isolated' Russia about to be bailed out by the world's largest economy China?

http://www.scmp.com/business/banking-finance/article/1664567/russia-may-seek-china-help-deal-crisis

IF this becomes a reality, and so far it is mere speculation - then unless mistaken, the relevant sum is around $25 billion USD.

How long would that last? How much would it hurt the Chinese economy?

Bottom line isthe world's biggest economy is obviously going to do everything it can because China knows if Russia goes it will be the next target for the US and EU elitists.

[Publicus]

It is indeed $25 billion which come January in Russia will buy a loaf of bread.

in November the Russian central bank essentially incinerated $80 billion before surrendering to the inevitable crash of the ruble. The 625 basis point increase in the interest rate was radical so it therefore rattled the markets even more than they had been already. There's nothing like a desperation move to send the markets and capital in the opposite direction from what Russia needs.

The swap agreement which was made in October when sanctions were well underway is for 150 billion yuan, which shows the two governments anticipated that some emergency might present itself reasonably soon. The mention now by the CCP Boyz of only 15 billion yuan shows very clearly that in the pinch Beijing is not about to throw very much money down the Russian black hole

This amount if it does come from the Boyz in Beijing is a token gesture, an illusory bailout that amounts to nothing more than an attempt to show solidarity between two authoritarian regimes that are in decline. The amount is in fact a joke under present circumstances and conditions. It shows Russia to be ever more desperate and flailing.

And where are the other Brics, India and Brazil in particular...

[F430murci]

The blurred lines between the state and Russian firms mean the Kremlin may end up on the hook for much of the $614 billion in external debt owed by banks and other firms. No wonder confidence in the prop provided by the Kremlins foreign-exchange reserves, officially valued at $370 billion, is draining.

. . .

Now creeping price rises have been replaced by something more ominous: Russian shopkeepers have started to re-price their goods daily. Less than two weeks ago one dollar could be bought with 52 roubles; on December 16th between 70 and 80 were needed. Shops defending their dollar income need a price rise of 50% to offset this. Russian workers pay will be cut massively in real terms.

http://www.economist.com/node/21636720

[zydeco]

The blurred lines between the state and Russian firms mean the Kremlin may end up on the hook for much of the $614 billion in external debt owed by banks and other firms. No wonder confidence in the prop provided by the Kremlins foreign-exchange reserves, officially valued at $370 billion, is draining.

. . .

Now creeping price rises have been replaced by something more ominous: Russian shopkeepers have started to re-price their goods daily. Less than two weeks ago one dollar could be bought with 52 roubles; on December 16th between 70 and 80 were needed. Shops defending their dollar income need a price rise of 50% to offset this. Russian workers pay will be cut massively in real terms.

http://www.economist.com/node/21636720

Not Weimar yet. At least nobody needs a wheelbarrow to carry their daily wages around, so far. But I do think this round of suffering is something new for Russians. For the first time in their history, a good portion of the populace was prosperous. Now, it's all going pffft. The most dangerous social situation in the world is when rising expectations collide with declining economic reality. More than long term oppression, that is what produces revolutions.

[Morch]

and so it goes by grand design the world's biggest economy to the rescue

Russia may seek China help to deal with crisis

Is 'isolated' Russia about to be bailed out by the world's largest economy China?

http://www.scmp.com/business/banking-finance/article/1664567/russia-may-seek-china-help-deal-crisis

IF this becomes a reality, and so far it is mere speculation - then unless mistaken, the relevant sum is around $25 billion USD.

How long would that last? How much would it hurt the Chinese economy?

Bottom line isthe world's biggest economy is obviously going to do everything it can because China knows if Russia goes it will be the next target for the US and EU elitists.

Where in the article you linked is there such a bottom line? There are speculations, not any guarantee that the PRC will step up and give Russia a hand. Not "obviously going to do everything it can".

[F430murci]

The blurred lines between the state and Russian firms mean the Kremlin may end up on the hook for much of the $614 billion in external debt owed by banks and other firms. No wonder confidence in the prop provided by the Kremlins foreign-exchange reserves, officially valued at $370 billion, is draining.

. . .

Now creeping price rises have been replaced by something more ominous: Russian shopkeepers have started to re-price their goods daily. Less than two weeks ago one dollar could be bought with 52 roubles; on December 16th between 70 and 80 were needed. Shops defending their dollar income need a price rise of 50% to offset this. Russian workers pay will be cut massively in real terms.

http://www.economist.com/node/21636720

Not Weimar yet. At least nobody needs a wheelbarrow to carry their daily wages around, so far. But I do think this round of suffering is something new for Russians. For the first time in their history, a good portion of the populace was prosperous. Now, it's all going pffft. The most dangerous social situation in the world is when rising expectations collide with declining economic reality. More than long term oppression, that is what produces revolutions.

Not quiet yet, but happening as we speak. Our friends in Moscow that went to school with my wife are all buying Porsches, Audis and Mercedes within the last week or so. The prices are way down right now and they are putting their Rubles in assets that are about to appreciate in value and costs dramatically. Seems carzy, but kind of makes sense. I think this week and next week is when we will start to see prices soar, runs on the banks and caps on outflow of currency or purchasing dollars. Inflation was relatively staved off, but still in the 9+% range up until the last week. These latest dramatic ruble value drops are going to create daily repricing and there will be a lag in keeping up with and perhaps under reporting of true CPI numbers if pricing starts to change daily. I somewhat think that everyone has remained calm thinking this would reverse, but that calmness is turning into uneasiness and will continue to exacerbate unless the Ruble stabilizes very quickly.

Just looked, maybe there is hope on the horizon. Ruble at $ 61 so it pulled back from the $ 78 it was at on Tuesday.

Edited December 18, 2014 by F430murci

[jpinx]

It takes a lot more than just 10% inflation and silly bank rates to cause the kind of daily revaluation you mention - maybe similar to how life on the streets was during the breakup of Yugoslavia. In that situation you only changed hard currency for what you were going to buy within 12 hours. Russia is not there yet, and whether it reaches that state depends on whether Putin can now walk the walk -- maybe with some invisible propping from China. Wasn't Russia buying gold a month or 2 ago? They could easily use that to guarantee trade with China, India, even Thailand

[F430murci]

It takes a lot more than just 10% inflation and silly bank rates to cause the kind of daily revaluation you mention - maybe similar to how life on the streets was during the breakup of Yugoslavia. In that situation you only changed hard currency for what you were going to buy within 12 hours. Russia is not there yet, and whether it reaches that state depends on whether Putin can now walk the walk -- maybe with some invisible propping from China. Wasn't Russia buying gold a month or 2 ago? They could easily use that to guarantee trade with China, India, even Thailand

I hear you on the 10%, but that is why I indicated that the price changes had only started this week and will have to change unless they can get Ruble somewhere back in the low 40s. The 10% inflation was the number prior to the Ruble's latest free fall. Things are happening pretty quick.

Regarding gold, I think they bought about 150 tonnes this year, but its gold holdings I believe are less than 10% of its total foreign reserves. They are definitely in a cash crunch after spending $80 of its reserve to try and prop up the Ruble. They very well could start selling off gold to fill the coffers. That would certainly drive the price of gold down also so they would have book losses on the 150 tonnes purchased.

__________

Russian shoppers are lining up at some stores in Moscow to buy big-ticket items in anticipation of price increases.

But Braginsky says the buying spree offers limited benefits for companies.

"Now, consumers are buying hectically. Because Russia largely [relies] on imported goods," he said. "There are a lot of stocks which were brought into the country at different currency levels. So, people are buying iPhones, they're buying imported cars, and the clothes, and everything they could buy still at old prices. So, it's a -- short-term at least, it's a consumer boom in Moscow."

http://www.russianews.net/index.php/sid/228653825#sthash.I1UpDVTZ.dpuf

Edited December 18, 2014 by F430murci

[Publicus]

Wonder what those who say Putin 100% will not back down or concede might think Nato which includes Washington and Ottawa and in addition the larger EU could be thinking in the public commitment to take this through 2017 ....

Ruble crisis could shake Putin’s grip on power

But opinion pollsters say discontent with the ruble’s fall and deepening economic gloom will gradually hit the emerging middle class in the big cities and then spread to his support base in the provinces.

“I think he has a store of support that can last 1-1/2 to two years,” Lev Gudkov, head of the Levada Center, an independent polling group, said by telephone. “We will see the first signs of discontent in the spring.”

Putin is aware that his predecessor, Boris Yeltsin, resigned early after a financial crisis and that Soviet leader Mikhail Gorbachev’s grip on power slipped as the economy crumbled.

http://www.srnnews.com/ruble-crisis-could-shake-putins-grip-on-power-2/

The talk stopped some time ago about Putin shutting off gas and oil to Europe and elsewhere...maybe that's because he'd lose $1 billion a day on a full cutoff. The EU is ready anyway with almost 200 million barrels of oil on standby (during last year's average temperatures winter EU consumed the equivalent of 131 mn barrels). The EU is already signing up alternate sources of energy that are not geostrategic rivals, such as Madagascar, for the indefinite future.

There's no more talk about Putin putting Russia on the gold standard with the CCP and its PRC along with the rest of the Brics even though this looks more than ever like the time for these guys to make their move -- destroy the petrodollar and the USA and all of that.

No more talk of Putin demanding gold for gas and for oil, or Putin demanding payment in rubbles or CNYuan. The right wing generated referendum to return to gold in Switzerland went completely bust. Putin instead is soliciting the CCP Boyz in Beijing for a bailout, and a modest one at that.

No more talk of Putin the chessmaster which is probably because Putin never played chess against any one he couldn't put in jail. Same for judo.

Edited December 18, 2014 by Publicus

[jpinx]

........................... No more talk of Putin the chessmaster which is probably because Putin never played chess against any one he couldn't put in jail. Same for judo.

=======================

Really like that one -- so funny and so true!!!

[jpinx]

It takes a lot more than just 10% inflation and silly bank rates to cause the kind of daily revaluation you mention - maybe similar to how life on the streets was during the breakup of Yugoslavia. In that situation you only changed hard currency for what you were going to buy within 12 hours. Russia is not there yet, and whether it reaches that state depends on whether Putin can now walk the walk -- maybe with some invisible propping from China. Wasn't Russia buying gold a month or 2 ago? They could easily use that to guarantee trade with China, India, even Thailand

I hear you on the 10%, but that is why I indicated that the price changes had only started this week and will have to change unless they can get Ruble somewhere back in the low 40s. The 10% inflation was the number prior to the Ruble's latest free fall. Things are happening pretty quick.

Regarding gold, I think they bought about 150 tonnes this year, but its gold holdings I believe are less than 10% of its total foreign reserves. They are definitely in a cash crunch after spending $80 of its reserve to try and prop up the Ruble. They very well could start selling off gold to fill the coffers. That would certainly drive the price of gold down also so they would have book losses on the 150 tonnes purchased.

__________

Russian shoppers are lining up at some stores in Moscow to buy big-ticket items in anticipation of price increases.

But Braginsky says the buying spree offers limited benefits for companies.

"Now, consumers are buying hectically. Because Russia largely [relies] on imported goods," he said. "There are a lot of stocks which were brought into the country at different currency levels. So, people are buying iPhones, they're buying imported cars, and the clothes, and everything they could buy still at old prices. So, it's a -- short-term at least, it's a consumer boom in Moscow."

http://www.russianews.net/index.php/sid/228653825#sthash.I1UpDVTZ.dpuf

That's the usual tactic -- dump your holdings of the wobbly currency into whatever imported hardware you can get your hands on. It demonstrates the amount of cash being held by normal people and creates the perverse illusion of a country defying the crisis -- driving around in new cars in their new suits past food shops with empty shelves. Russia really doesn't produce anything substantial for export -- only oil and gas. They don't have a single export-driven industry to speak of. People will be angry about the increased rouble-cost of imported goods, but that is not enough on it's own to threaten political upheaval. Much depends on what China is prepared to do - but they have a massive industrial output which does depend on the markets in the west, so PRC will not be wanting to hurt themselves by doing too much. More likely some additional purchase contracts of energy with big prepayments - which can be excused as a "normal" commercial transaction taking advantage of the low prices.

Putin has boxed himself in politically. He can't just hand back Crimea and East Ukraine, but he certainly knows that he has created a situation far worse than Russia was facing if he had not taken those actions. Unilateral land-grabbing and border "adjustments" never do down well internationally. The west can slowly tighten the screws and watch russia eat itself from the inside, but what will emerge might actually be more radicalised then they expect. This is not going to be done in a day or a week, so best to settle in for the long haul and live with oil at $60. It'll slim the west's oil industries too -- no bad thing - and it'll kill the expensive and dubious new extraction methods for some time too.

Gold? The west has pretty much rejected gold as a standard, especially as a lot of it seems to exist on paper only and the IMF is happy with that. Russia will find temporary relief by using it's holdings to trade with Asia and perhaps S.America - maybe long enough to get through the winter and in the sunny spring days people will be less likely to actually revolt against whatever medicine Putin forces down their throats.

[Publicus]

It could be that Vlad might be trying to chart his MOE (means of escape) from the impending catastrophe....

Ruble Trouble: The Politics of Russia’s Financial Crisis

In a major speech in early December, Putin declined to use the word ‘Novorossia’ and focused entirely on Crimea, a territory he described as ‘sacred’ to Russians. This overblown rhetoric about Crimea is an attempt to refocus Russians’ attentions on the ‘success’ in Crimea—and to distract them from the fact that the Kremlin has gotten mired down in the Donbass. More than at any point since the war began, it looks as though the Kremlin is preparing to call a retreat."

http://www.fpri.org/articles/2014/12/ruble-trouble-politics-russias-financial-crisis

The author quotes contemporary historian Nikolai Svanidze, a biographer of PM and former prez Dmitry Medvedev, saying Russians face a choice between the tv and the fridge, that they can believe Putin's propaganda but when the fridge is finally empty things might change radically or even suddenly.

[jpinx]

It could be that Vlad might be trying to chart his MOE (means of escape) from the impending catastrophe....

Ruble Trouble: The Politics of Russia’s Financial Crisis

In a major speech in early December, Putin declined to use the word ‘Novorossia’ and focused entirely on Crimea, a territory he described as ‘sacred’ to Russians. This overblown rhetoric about Crimea is an attempt to refocus Russians’ attentions on the ‘success’ in Crimea—and to distract them from the fact that the Kremlin has gotten mired down in the Donbass. More than at any point since the war began, it looks as though the Kremlin is preparing to call a retreat."

http://www.fpri.org/articles/2014/12/ruble-trouble-politics-russias-financial-crisis

The author quotes contemporary historian Nikolai Svanidze, a biographer of PM and former prez Dmitry Medvedev, saying Russians face a choice between the tv and the fridge, that they can believe Putin's propaganda but when the fridge is finally empty things might change radically or even suddenly.

Indeed Putin will have to do something, but he does not have a history of making sensible decisions, more likely to be something from left-of-field and a bit drastic. Meanwhile the repercussions reverberate. Note the threats to credit cards, the enforcement of currency exchange to local, restrictions on imports of components for factories - so production will wind down and jobs go.

This is a long process -- there's no quick fix. What matterss maybe more than anything is whether the russians learn to get themselves a leader who actually represents their best interests and not those of himself and his mates

http://www.bbc.com/news/business-30555874

http://www.bbc.com/news/business-30552925

[Publicus]

It could be that Vlad might be trying to chart his MOE (means of escape) from the impending catastrophe....

Ruble Trouble: The Politics of Russia’s Financial Crisis

In a major speech in early December, Putin declined to use the word ‘Novorossia’ and focused entirely on Crimea, a territory he described as ‘sacred’ to Russians. This overblown rhetoric about Crimea is an attempt to refocus Russians’ attentions on the ‘success’ in Crimea—and to distract them from the fact that the Kremlin has gotten mired down in the Donbass. More than at any point since the war began, it looks as though the Kremlin is preparing to call a retreat."

http://www.fpri.org/articles/2014/12/ruble-trouble-politics-russias-financial-crisis

The author quotes contemporary historian Nikolai Svanidze, a biographer of PM and former prez Dmitry Medvedev, saying Russians face a choice between the tv and the fridge, that they can believe Putin's propaganda but when the fridge is finally empty things might change radically or even suddenly.

Indeed Putin will have to do something, but he does not have a history of making sensible decisions, more likely to be something from left-of-field and a bit drastic. Meanwhile the repercussions reverberate. Note the threats to credit cards, the enforcement of currency exchange to local, restrictions on imports of components for factories - so production will wind down and jobs go.

This is a long process -- there's no quick fix. What matterss maybe more than anything is whether the russians learn to get themselves a leader who actually represents their best interests and not those of himself and his mates

http://www.bbc.com/news/business-30555874

http://www.bbc.com/news/business-30552925

One analyst I'd quoted said the Russian people are into Putin for another year and a half to two years while this young Russian expert references the choice the people have between the tv and the fridge, i.e., stubborn pride reinforced vs stark necessity.

Putin does have a deep reservoir of of support and he is predictably unpredictable but the chess board presents only so many moves by each player within the limitations of each figure, and we know Putin never played chess against anyone he couldn't put in jail (which may indeed be the problem).

What I get most out of all this is the fact that along with Putin others have had their bubble popped about the global order. A gold standard per se is out, as are the wildest imaginings of Russian oil paid for in rubles, yuan or gold. The petrodollar remains strong as does the USDollar as the global currency of trade and foreign currency reserve funds. The US is the new swing factor in global oil markets and increasingly in energy itself.

It' been said the Brics are falling and that they are falling because they have no mortar. Emerging economies that on the surface looked so hot several years ago are mired in flawed systems of their own making, rooted in profound corruption aggravated by no rule of law. This is the sphere of influence Putin tried to mold into his own force but now has seen it slip through his fingers.

I feel like I'm watching a James Bond adventure and that the grand final scene is about to unfold in which the Ninjas descend their ropes into the vaults of the Russian central bank while loud noises interrupt the unknowing Vlad who is on global satellite tv pronouncing that he's the new boss....

[jpinx]

Unless you are a Russian or have worked with them for a while, you can not understand their mind-set. It's as un-understandable as the Thai mentality. There is no way any western commentator or analyst can say what they'll do because not even they know what they'll do -- there's no plan, just manoeuvring around the obstacles between them and their objective. Problem is that no-one -- not even they -- really know what their objectives are.

Russia is basically paranoid -- terrified of losing it's "identity" and totally under-confident in their own culture and abilities. Everything they do is founded on that dysfunctional psyche. If they had the confidence to meet the rest of the world on equal terms they would actually do very well.........

[Asiantravel]

Unless you are a Russian or have worked with them for a while, you can not understand their mind-set. It's as un-understandable as the Thai mentality. There is no way any western commentator or analyst can say what they'll do because not even they know what they'll do -- there's no plan, just manoeuvring around the obstacles between them and their objective. Problem is that no-one -- not even they -- really know what their objectives are.

Russia is basically paranoid -- terrified of losing it's "identity" and totally under-confident in their own culture and abilities. Everything they do is founded on that dysfunctional psyche. If they had the confidence to meet the rest of the world on equal terms they would actually do very well.........

While the current episode of Russian geopolitical and economic turmoil may seem significant, the following chart from Goldman Sachs shows the tempestuous time the nation has had over the past 150 years...

[F430murci]

Unless you are a Russian or have worked with them for a while, you can not understand their mind-set. It's as un-understandable as the Thai mentality. There is no way any western commentator or analyst can say what they'll do because not even they know what they'll do -- there's no plan, just manoeuvring around the obstacles between them and their objective. Problem is that no-one -- not even they -- really know what their objectives are.

Russia is basically paranoid -- terrified of losing it's "identity" and totally under-confident in their own culture and abilities. Everything they do is founded on that dysfunctional psyche. If they had the confidence to meet the rest of the world on equal terms they would actually do very well.........

While the current episode of Russian geopolitical and economic turmoil may seem significant, the following chart from Goldman Sachs shows the tempestuous time the nation has had over the past 150 years...

So what the heck are you trying to say,

[Publicus]

There was a large Ukrainian community the other side of a park where I grew up way back when, side by side with a Polish community....so many of all of us kids from that part of the city have done very well in the USA over the decades, and regardless of our diverse European ancestries all of us are grateful to our progenitors for migrating to the United States. It's made a world of difference for us and for our posterity.

Several weeks ago I was part of a small business group that met an entourage of eight Russians who arrived on a two day buying trip. Several did some buying. A couple of 'em were fluent in English. They were buying and we were selling so at dinner with the wine flowing they talked and we listened. They don't like the United States. Not at all. Yes Putin is corrupt and an egomaniac, but by all that's right he's Russian through and through, is what I got. They really really don't like us -- really.

I wish Russia well for sure and was pleased to see 'em break away from their Soviet period, but it seems they just ne'er do well over there no matter what.

Edited December 20, 2014 by Publicus

[Asiantravel]

Unless you are a Russian or have worked with them for a while, you can not understand their mind-set. It's as un-understandable as the Thai mentality. There is no way any western commentator or analyst can say what they'll do because not even they know what they'll do -- there's no plan, just manoeuvring around the obstacles between them and their objective. Problem is that no-one -- not even they -- really know what their objectives are.

Russia is basically paranoid -- terrified of losing it's "identity" and totally under-confident in their own culture and abilities. Everything they do is founded on that dysfunctional psyche. If they had the confidence to meet the rest of the world on equal terms they would actually do very well.........

While the current episode of Russian geopolitical and economic turmoil may seem significant, the following chart from Goldman Sachs shows the tempestuous time the nation has had over the past 150 years...

So what the heck are you trying to say,

Russia can last longer than the west. Their debts are lower. Their banks are not leveraged like the west. They have less oil income, but they still have income. (Ask Greece, Italy, Spain, France how they are doing.) Europe is hanging on by it's fingernails.

Winter is coming and Russia supplies one third of Europe's gas.

Putin is very popular in Russia. He doesn't have to run for office and the Russian people are used to hardship.

And don't forget China is getting very chummy with Russia and they have 1.5 trillion of crappy US paper they are regretting buying.

[thailiketoo]

Russia can last longer than the west. Their debts are lower. Their banks are not leveraged like the west. They have less oil income, but they still have income. (Ask Greece, Italy, Spain, France how they are doing.) Europe is hanging on by it's fingernails.

Winter is coming and Russia supplies one third of Europe's gas.

Putin is very popular in Russia. He doesn't have to run for office and the Russian people are used to hardship.

And don't forget China is getting very chummy with Russia and they have 1.5 trillion of crappy US paper they are regretting buying.

I'm sure standing on your head is very good exercise but not a good idea when trying to read financial charts. You seem to have it 180 reversed . The Ruble is crashing not the dollar. Russian people are buying out the stores of goods in anticipation or a run on Russian banks. The Russian economy has collapsed not the Western economy. There are many calls for Putin to step down.

(Russia) is highly dependent on its oil-and-gas firms. Hydrocarbons contribute over half the federal budget and two-thirds of exports. The state has big stakes in many energy firms, as well as indirect links via the state-supported banks that fund them. The oil price has fallen by almost half in the past six months--it dropped below $60 this week, its lowest level since the depths of the financial crisis. The rouble has followed oil down.

http://www.businessinsider.com/things-could-get-much-worse-for-russia-2014-12

The Russian state has around $11 billion in rouble-denominated and $60 billion in dollar debt.

State banks are imposing limits on the amount of dollars and euros they sell. A branch of Sberbank in central Moscow will sell only $2,000.

Anyway good luck with the exercise but try reading the financial news right side up next time.

[Publicus]

Unless you are a Russian or have worked with them for a while, you can not understand their mind-set. It's as un-understandable as the Thai mentality. There is no way any western commentator or analyst can say what they'll do because not even they know what they'll do -- there's no plan, just manoeuvring around the obstacles between them and their objective. Problem is that no-one -- not even they -- really know what their objectives are.

Russia is basically paranoid -- terrified of losing it's "identity" and totally under-confident in their own culture and abilities. Everything they do is founded on that dysfunctional psyche. If they had the confidence to meet the rest of the world on equal terms they would actually do very well.........

While the current episode of Russian geopolitical and economic turmoil may seem significant, the following chart from Goldman Sachs shows the tempestuous time the nation has had over the past 150 years...

So what the heck are you trying to say,

Russia can last longer than the west. Their debts are lower. Their banks are not leveraged like the west. They have less oil income, but they still have income. (Ask Greece, Italy, Spain, France how they are doing.) Europe is hanging on by it's fingernails.

Winter is coming and Russia supplies one third of Europe's gas.

Putin is very popular in Russia. He doesn't have to run for office and the Russian people are used to hardship.

And don't forget China is getting very chummy with Russia and they have 1.5 trillion of crappy US paper they are regretting buying.

If I might butt in for a moment, this is also about the United States as the suddenly new swing factor in the global oil market, displacing Opec, while witnessing regime change in process in oil rich Venezuela along with the realignment of Cuba. Many of us had expected that later in the decade the US would sort out its own back yard but events have clearly brought that focus to fruition early due to the significance of the major geostrategic shifts occurring in Eurasia.

It is also about reducing some of Russia's oligarch controlled oil and gas conglomerates and concerning Russia's geostrategic direction as a significant source of energy.

The EU wants Ukraine in the EU and the US wants Ukraine in the EU as does Nato. Putin has driven Ukraine away from Russia instead of trying to attract it toward its historical kin. Ukraine wants Western society, culture, political and economic systems and now it will have to become a part of the EU and Nato to secure those values and institutions because Putin has made himself into an ogre against Ukraine.

Putin is dragging down neighboring economies and countries of Central Asia that use the ruble or rely substantially on the ruble and the Russian economy. While I'm not Russian, I'd step forward to suggest this is not in Russia's interest. Central Asia being Central Asia, it is the central geostrategic area of the world given the countries around it, such as Iran, the Middle East, Eurasian Russia, India, Pakistan, China, to include Asean, Taiwan, S Korea, Japan, the Russian far East.

And don't ask the great number of the Central Asian countries what they think of the CCP Boyz in Beijing unless you're prepared to get an answer you do not like. It just might be the geostrategic reality that Ukraine could be viewed as a way station to a greater Eurasian union.

[Asiantravel]

Putin May End Ruble Crisis By Taking Russia Onto the GOLD STANDARD!

[thailiketoo]

Putin May End Ruble Crisis By Taking Russia Onto the GOLD STANDARD!

Russia Not Selling Gold, It's Buying; Reflections on Extremely Sloppy Reporting

http://globaleconomicanalysis.blogspot.com/2014/12/russia-not-selling-gold-its-buying.html

Gee you got it 180 degrees backward again.

What century do you see the Ruble going up again?

Edited December 20, 2014 by thailiketoo

[Asiantravel]

Putin May End Ruble Crisis By Taking Russia Onto the GOLD STANDARD!

Russia Not Selling Gold, It's Buying; Reflections on Extremely Sloppy Reporting

http://globaleconomicanalysis.blogspot.com/2014/12/russia-not-selling-gold-its-buying.html

Gee you got it 180 degrees backward again.

What century do you see the Ruble going up again?

Russia Is Not Selling Gold, Bought 18t In November

Putin " I said that given the most unfavourable foreign economic situation this could last (approximately, because no one can say for certain) for about two years. However, it may not last that long and the situation could take a turn for the better sooner. It could improve in the first or second quarter of next year, by the middle of next year, or by its end

…Overall, I think it is up to the Central Bank to decide whether to reduce the interest rate or not, they should see and react accordingly. They should not hand out our gold and foreign currency reserves or burn them on the market, but provide lending resources

"

www.bullionstar.com/blog/koos-jansen/russia-selling-gold/