Actually, the opposite is happening. The Russian central bank is not flooding the market with fiat Rubles to shore it up, they are allowing it to fall in value and pumping up interest rates.
I doubt it will work well, but its much closer to the US Fed in the early 80s tight money policy that caused skyrocketing interest rates.
We are doing the opposite with tidal waves of quantitative easing.
One of us will prove wrong.
The Russians only real move is to price their gas in a gold based trade currency, and become the main oil supplier to China. But this is all a very bad game and a lot of people will suffer over this. People in many places.
“a lot of people will suffer over this. People in many places.”
Like, say, in Alaska? Don’t look now but their dependence on milking big oil is not working out so well now.
Nope. False dichotomy. Both are wrong.
Flooding the market with fiat currency would not sure the currency up, and that isn't what the Fed is doing. The Fed is attempting to increase demand by effectively cutting taxes to preferred customers [QE is essentially a tax refund on borrowed cash.]. The Russians are not "allowing" the ruble to fall: they have very little choice. What the Central Bank did today was an attempt to stop the currency free-fall by raising interest rates, it will not do very much good, because the Russian economy is not large enough for a substantial interest rate hike to do anything but cause a liquidity crisis.
"And this is only going to get worse. Russia, you see, is stuck in an economic catch-22. Its economy needs lower interest rates to push up growth, but its companies need higher interest rates to push up the ruble and make all the dollars they borrowed not worth so much. So, to use a technical term, they're screwed no matter what they do. If they had kept interest rates low, then the ruble would have continued to disintegrate, inflation would have spiked, and big corporations would have defaulted—but at least growth wouldn't have fallen quite so much."
“I doubt it will work well, but its much closer to the US Fed in the early 80s tight money policy that caused skyrocketing interest rates.”
I just noticed the familial resemblance between Pooty Poot and Jimmah Cahatah! The have the same fiscal policies too. Brother Billy was right, there are Russians in their woodpile! Who knew.
Yea and the blame can be placed entirely at Putin and Russkies doorsteps, eh comrade!
They thought they could take on the world, maybe because of the wimp in the WH they thought we were a pushover, well welcome to reality. Just what some of claimed would happen (not you though...oh no). What’s next yea possible world war, we said that months ago as the Putinista’s here cheered Putin on.