Posted on 12/15/2014 4:19:02 PM PST by Oldeconomybuyer
MOSCOW — With Russia scrambling to contain a currency crisis, the country’s central bank, in a surprise middle-of-the-night move, increased its key interest rate to 17 percent, from 10.5 percent.
Aleksei L. Kudrin, a former Russian finance minister who is widely credited with having steered Russia through the 2008 financial crisis by convincing President Vladimir V. Putin to build up sovereign reserves, said that uneven policy making was adding to the erosion of confidence.
“The fall of the ruble and the stock market is not only a reaction to lower oil prices and sanctions, but also distrust in the government’s economic measures,” Mr. Kudrin posted on Twitter.
(Excerpt) Read more at nytimes.com ...
Good for the ruble, bad for the Russians.
We’ve been there...as high as 19%. In the early 80’s I think. I was selling my house. No sale...
In theory the move might be good for the ruble but given that the entire economy is a basket case, I wonder if anything short of increasing oil prices can make a meaningful change.
Welcome to the new American heg vlad.
The dollar is crushing your tiny ruble.
Russia interest rates hit something like 150% in the late 90’s.
As Zerohedge notes, they are taking a COMPLETELY different tack than the EU.
Instead of handing the bankers tens of billions in printed money, they get the bankers to hand THEM Billions. Especially countries that don’t give a damn about US Sanctions, like China and India.
Instead of talking about rates, like the Fed and the EU, the Russians just unloaded the Bazooka.
(Russian accent)
“In E.U., you pay bank to park your own money.
In Russia, da Bank pay you!!”
Loose fiscal policy eventually either leads to:
1. Change of government
2. War
3. Both
Good reading on the topic of currency wars:
http://www.forbes.com/sites/ralphbenko/2012/03/12/book-review-james-rickards-currency-wars/
In Russia do they have a website for American Mail Order Husbands? I could probably live off of the interest in my savings over there.
Carry trade, ruble rises, carry trade unwind, ruble crashes.
Wars have been started for less.
Higher interest rates fixed our 70s problem in the early 80s, but damn!!! Go to bed at 10.5, wake up to 17%?? Dude,,,i would certainly say they are proving a willingness to intervene aggressively.
LOL. Great for the oligarchs sitting on piles of money. Not so much for average Russian trying to buy a house or a car or use a credit card.
That Putin, he’s so crafty. Who could have imagined setting up this situation like he did? Just brilliant!
Funny how Carter was trashed for pretty much the same thing.
That dumb ass Reagan huh! /s
But those of us who didn't need to take out loans, or rely on others taking out loans to buy from us, loved the interest accruing in our accounts. One man's spit-in-the-face is another man's smiley face...
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