Posted on 12/15/2014 10:12:57 PM PST by elhombrelibre
A funny thing happened on the way to Vladimir Putin running strategic laps around the West. Russia's economy imploded.
The latest news is that Russia's central bank raised interest rates from 10.5 to 17 percent at an emergency 1 a.m. meeting in an attempt to stop the ruble, which is down 50 percent on the year against the dollar, from falling any further. It's a desperate move to save Russia's currency that comes at the cost of sacrificing Russia's economy. So even if it "works," things are about to get a lot worse.
It's a classic kind of emerging markets crisis. It's only a small simplification, you see, to say that Russia doesn't so much have an economy as it has an oil exporting business that subsidizes everything else. That's why the combination of more supply from the United States, and less demand from Europe, China, and Japan has hit them particularly hard. Cheaper oil means Russian companies have fewer dollars to turn into rubles, which is just another way of saying that there's less demand for rubles—so its price is falling. It hasn't helped, of course, that sanctions over Russia's incursion into Ukraine have already left Russia short on dollars.
(Excerpt) Read more at washingtonpost.com ...
rofl
Not content with toppling #1 they want to knock out a few more. How is war not inevitable? How convenient to have us murder each other instead of them.
I think you missed the sarcasm.
Nobody here cheered on the reports about the Stalin rehabilitation either.
see #13
What I wrote is basically happening
~Yep, I just feel how excited you are over possible revival of communism in Russia. So ‘conservative’ of you.
Revival of communism? Vatnik, your country is run by “former” communists and KGB agents. Communism never left. It just lost the facade of Marxist-Leninism, leaving behind the kleptocracy and murder it was really all about to begin with.~
You aren’t honest as usual, puny.
As we have recently learnt you have no problem with Soviet-trained Marxists running EU finances if only they aren’t Russian.
You are a xenophobe, puny.
And you are about as ‘conservative’ as Saul Alinsky.
“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.
The current Fascist dictatorship is so much more preferable.
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.
The cure for both is pretty much: Live within your means, idiots.
If you haven’t seen the “Mouse that Roared” with Peter Sellers, it used to strike a cord, Germany and Japan both learned that losing a war to America was pretty useful.
In fact a volatility of the ruble is mostly speculative right now.
Oil was lower in 2008 but it hasn’t effected exchange rate as much.
There are added negative factors this time but these aren’t so overwhelming.
LOL, so after you try to go on the offensive and make me a Soviet supporter, when that is what you are, you then use a leftist talking point and call me a "xenophobe." Vatnik, we Americans who do not want Russian domination hate your country for good reason, not because we are "xenophobic," but because you and your country hate us and have been working to destroy us for decades.
Actually “we” have really gone a looooong time without a World War..
The progressives must be pining for some blood...
You know.. just a few BILLION!...
The pikers Stalin, Hitler and Mao only murdered a few hundred million.. (that we know about)..
All of the games with interest rates and monetary policy only work if you actually need to increase your money supply because of increased productivity/real GDP growth.
One of the reasons we have been able to get away with QE and massive borrowing for so long is that except for the period right before Y2K, Greenspan was restricting the money supply, effectively throttling our economy.
He was a fool: he actually once said that increased productivity causes inflation. Exactly the opposite is true.
Unless you have real GDP growth, the games played by the Central Banks are just a Three-Card Monte. When the shuffling stops and there's no there-there, who do you think is going to lose? It won't be Putin and his Oligarchs, and it won't be our 0.001%'ers.
There is something to be said for not being mired down in debt like Russia is not. I’m more worried about Communism here. Here Communists just call themselves anticapitalists.
Wetphoenix claims to be in the Russian special forces? LOL. Don't forget that people like this are pathological liars. He was probably recruited by the Lubyanka from the local bar because he knew enough English to troll us. After he gets done posting with us he passes out in the gutter and dreams vain dreams.
~LOL, so after you try to go on the offensive and make me a Soviet supporter, when that is what you are, you then use a leftist talking point and call me a “xenophobe.” Vatnik, we Americans who do not want Russian domination hate your country for good reason, not because we are “xenophobic,” but because you and your country hate us and have been working to destroy us for decades.~
I am not making you anything that you already aren’t.
I haven’t done a single thing harmful to your country personally nor did any of my friends here.
Hahaha, the old “speculators are destroying the value of our money” routine. Every dictator tries that one. It’s a lot of hooey. The ruble is tanking because it was psychologically inflated on the expectation of growth, which isn’t going to happen, so there’s a flight to safer currencies and forms of cash.
bump
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