Posted on 11/17/2014 2:31:16 AM PST by Berlin_Freeper
Every central banker knows the importance of trust. In a world of fiat currencies--bank notes backed by nothing other than more bank notes--shoppers and firms must have confidence that cash will retain its value in order to hold it.
That trust is being tested in Russia, where the rouble has fallen 23% against the dollar in the past three months.
Such a plunge inevitably brings inflation in the form of more expensive imports, a worry given that consumer prices in Russia are already rising at over 8% a year. Yet in recent weeks there have been creeping signs of something scarier. Faced with a clamour for dollars, Russia's banks have raised the rates they pay on dollar deposits to try to suck some in. Demand for safety-deposit boxes is up, suggesting customers are hoarding foreign currency.
(Excerpt) Read more at businessinsider.com ...
Yes but I’d trade our dumb ass for their dumb ass.
Least their dumb ass acts like a man, not a little nancy boy.
If world oil prices stay in the $80 dollar range, Putin will be gone! And Obola had nothing to do with it.
In fact crumbling ruble might be an annoyance for Russian middle class but it is certainly a gift for manufacturers and exporters.
It makes imports way beyond rich of local customers forcing them to buy Russian.
Also exporters’ costs are all in rubles, making their products more affordable abroad.
Really stupid to put cash in a safety deposit box under those conditions. The government will just take it.
Well, as far as I remember last time Russian government did something like that was under Stalin’s presidency.
EU has worse record in newer history regarding Cyprus.
Putin has been buying large quantities of gold bullion. It’s either to protect himself and cronies if ruble implodes or to be used for a fractional reserve currency.
Thank you for ably demonstrating you are just as clueless about economics and banking as any typical Russian Communist ever was. Russian manufacturers simply cannot come up with enough Russian rubles to produce much of anything anyone outside of Russia would ever want, and not enough rubles to continue operations to deliver sufficient products for the domestic markets.
The only problem with Domestic Russian Manufactured Goods is that they are complete crap. What do they export other than oil and weapons?
You are exactly right, and in an environment where world trade operated on something resembling a level playing field that is exactly what would happen.
But that is not the environment the world is operating in...due in no small measure to the group of psychopaths running things in the West.
Not too much, and that is a problem. They don't export many agricultural products and virtually no consumer goods.
A very few will profit from this, mainly it will be much harder to feed the population as the ruble falls. See Venezuela.
The fallacy in your thought is that Russia can’t manufacture the things people want.
Why do you think oil is so cheap? It hurts Russia and fracking at the same time.
In mid2000s Kaliningrad BMW works made the best 5-series available which is recognized by BMW.
I could pick Russian Autothor-made Chevy Tahoe or Trailblazer over original any day. So did Central Asia. Russian Chevy was valued ahead of American original in Stans for a long time.
Frankly the only difference between Russia and America is that America exports agricultural products.
Otherwise all we do is pay ever-more money we don’t actually have, for ever more Chinese exports.
Gas. But I guess that counts as oil. China and Russia just signed a huge, huge gas deal.
$60 oil would hurt Russia taxing oil companies which are still profitable at $30 a barrel. Go think about frackers who spend $70 just to extract a barrel.
Killing the Russian war chest and fracking at the same time, it is something that liberals and Saudis can agree on.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.