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Russia Ruble Collapse Escalates To Record Low

Tyler Durden's picture




 

With all eyes on Russia over the next month as the Sochi Winter Olympics ramps up, we are sure having the market's attention on a collapsing currency is not what Putin had in mind before he dropped $50 billion to make it snow. While the Ruble remains just above record lows against the USD, Bloomberg reports that it has dropped to a record low against the central bank's dollar-euro basket. Russia's finance minister proclaimed today (Erdogan style?) that Bank Rossii should not raise rates (which has been unchanged at 5.5% for the last 15 months). Russian CDS is widening (193bps at 4 month highs) but not cratering like other EM currencies but MICEX (stocks) have had their longest losing streak since April.

 

 

As Bloomberg adds,

The ruble depreciated 1.2 percent to 40.9632 versus the central bank’s dollar-euro basket by 6:01 p.m. in Moscow. A weaker ruble encourages Russians to withdraw and convert local- currency deposits, Sberbank’s main source of funding, while hurting retailers by making imports more expensive in ruble-denominated prices.

 

Investors are scared of the ruble devaluation,” Sergey Vakhrameev, an analyst in Moscow at AnkorInvest LLC, which manages about $30 million in assets, said by phone. “During strong devaluations, stock markets fall, investors become scared of indexes in countries where the devaluation isn’t controlled.”

Of course, this will only make the bank run problems worse...

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Wed, 01/29/2014 - 13:05 | 4380222 The_Ungrateful_Yid
The_Ungrateful_Yid's picture

Gold bitches...that is all

Wed, 01/29/2014 - 13:13 | 4380254 StacksOnStacks
StacksOnStacks's picture

Don't forget the Ag!

Wed, 01/29/2014 - 13:27 | 4380325 RebelDevil
RebelDevil's picture

Hold on! Are EM currencies losing value, or is the USD gaining value?
I'm skeptical.

Wed, 01/29/2014 - 13:30 | 4380337 economics9698
economics9698's picture

I like Ag instead.

Wed, 01/29/2014 - 13:43 | 4380387 CrashisOptimistic
CrashisOptimistic's picture

Gold is unimportant.

Russia is the number 1 oil producer in the world.  That's all that matters.  It is priced in dollars.  The lower the ruble, the more rubles come in every day as they sell about 8 mbpd of the 10.7 they extract from the ground.

Money is imaginary.  Gold is money and therefore its value is also dependent on agreement of parties.

Joules are not imaginary.

Wed, 01/29/2014 - 13:56 | 4380445 Jack Napier
Jack Napier's picture

Oil is lacking some of the desirable properties of gold, namely portability and durability.

Don't forget the 3 B's; beans, bullets, and band-aids. Gold and silver are a must, but they won't see you through the revaluation process.

Also, gold is not unique in that its value is dependent upon agreement of parties. The value of all things is subjective.

Wed, 01/29/2014 - 14:00 | 4380487 CrashisOptimistic
CrashisOptimistic's picture

No.  It is not.

Joules bring food to your shelf.  The value of calories is not subjective.

 

Wed, 01/29/2014 - 19:52 | 4382393 CharlieSDT
CharlieSDT's picture

Maybe, but the value to me is subjective.  Organic healthy calories I will pay a lot more for than GMO McDonald's poison calories.

 

 

Wed, 01/29/2014 - 21:02 | 4382601 Jack Napier
Jack Napier's picture

Food is of course more valuable than gold in a survival situation, but that doesn't mean that the amount of value agreed upon by two parties is not subjective. If I have all the tasty food I need then another's food has little to no value to me, and I may prefer gold so I can buy whiskey and back rubs instead. Of course the 'need' factor is greater with food than gold, but price and value (which are similar but not the same) are not products of need. They are products of supply and demand, and demand is influenced by but not directly correlated to need. If people prioritized their needs more highly than their wants we wouldn't be in this mess. I would agree if you had said the fact that calories have value is not subjective, but the same could be said for gold. Everything has value, the question is how much, and just as importantly, to whom.

Wed, 01/29/2014 - 23:01 | 4382936 Joseff Stalin
Joseff Stalin's picture

GMO McDonald's calories are more expensive, when you factor in the cancer and heart diease.

Wed, 01/29/2014 - 16:03 | 4381196 lakecity55
lakecity55's picture

ANY PMs, Bitches!!

In.Your.Hand.

Wed, 01/29/2014 - 13:30 | 4380334 knukles
knukles's picture

Hey!

The currency plummeting?

Just in time for massive demand as everybody going to Russia converts into Rubles from their own currencies!

Fuckin' A, momma!

Houston, we got a problem

Wed, 01/29/2014 - 13:46 | 4380393 Crash Overide
Crash Overide's picture

Is Leo Wanta in Moscow?

Wed, 01/29/2014 - 13:10 | 4380223 thunderchief
thunderchief's picture

If Russia is smart they will sell off the rest of their US treasuries and buy gold.

There is a new buyer in town and it is the lower 90% of Americans.

Beat China to the punch Russia, before its all gone.

Oh yeah, and quit exporting palladium and platinum..that is just plain retard.

Wed, 01/29/2014 - 13:41 | 4380372 Volkodav
Volkodav's picture

Yes...seems like you tell...and also I have thought rather than Olympics, those monies would be better in spend for gold reserves.

not second guess..wait

 

Wed, 01/29/2014 - 14:08 | 4380523 Levadiakos
Levadiakos's picture

Gonna be nickel night at the ole Sochi cathouses..................bitchez

Wed, 01/29/2014 - 13:47 | 4380385 Ham-bone
Ham-bone's picture

April '07 Russia held $7 B in treasury debt...peaking Nov '12 @ $166 B...now maintaining about $140 B. 

if T's were bought to weaken their currency...seems mission accomlished.  Does that mean you sell to strengthen the currency and take advantage of their energy exports rather than giving the blue gas away to EU cheap???

Wed, 01/29/2014 - 13:48 | 4380406 Kirk2NCC1701
Kirk2NCC1701's picture

All Russia has to do is to back their currency with PM -- all PM:  Platinum, Gold, Palladium, Silver.  In that order.  Then dump some USTs for good measure. 

What a fine way to tell the NWO to "take a long walk off a short pier".

Wed, 01/29/2014 - 14:28 | 4380575 Flakmeister
Flakmeister's picture

Why? The kleptocrats would not be able to loot as effectively...

The Russians running the show are greedy clowns with no real game plan... That should be very obvious...

Edit: Looting as fast as you can hardly qualifies as a game plan...

Wed, 01/29/2014 - 15:03 | 4380766 MsCreant
MsCreant's picture

You may be right, but Putin looks like a chess player to me. Some of the moves we see out of him have resulted in a checkmated opponent (US, Britain) here and there. Granted, we can call these plays mid-range thinking, but still I think there is more going on than just mindless looting.

No one has a plan they are implementing to deal with what is coming except individuals and small groups.

Get to your life raft.

Wed, 01/29/2014 - 15:34 | 4381011 Flakmeister
Flakmeister's picture

How was the US checkmated? Do tell...

Wed, 01/29/2014 - 16:04 | 4381204 MsCreant
MsCreant's picture

Unless you are a conspiracy theorist who thinks Snowden is not legit, then I give you the end result with Snowden as one example. Another one is the situation where we were going to invade Syria and Putin stepped in to "mediate" regarding the chemicals. We could not just roll on in after that. 

Wed, 01/29/2014 - 16:42 | 4381439 Flakmeister
Flakmeister's picture

Invade Syria?

The Kerry "Gaffe" allowed the situation to be defused and allowed Putin to save face... Unlike Bushie, this was mission accomplished at very little expense...

Wed, 01/29/2014 - 16:53 | 4381484 MsCreant
MsCreant's picture

So they all planned that behind closed doors? Or? Have a hard time following how that would get worked out in a real interaction with real human beings.

You are entitled to your interpretation of that event. None of us know what is really going on with these bastards, we are not there. It did leave me with the impression that the US was outmanuvered (even if we stepped on our own foot in reality) by the Russians. That looked to me like a checkmate which is what you asked for an example of.

Wed, 01/29/2014 - 19:56 | 4382403 Flakmeister
Flakmeister's picture

True, no one knows exactly what transpired. But to any serious student of history, this was a diplomatic masterpiece...

Syria is the last remaining Soviet client state in the Middle East, Kerry et al. got Putin to agree to throw Assad under the bus vis a vis his chemical weapons. All at very little real cost...

Wed, 01/29/2014 - 14:37 | 4380627 Thalamus
Thalamus's picture

.

Wed, 01/29/2014 - 14:34 | 4380628 Thalamus
Thalamus's picture

Then don't let the basket of precious metals exceed the value of your currency or Russia will have to "close the gold window."  

Wed, 01/29/2014 - 16:02 | 4381187 lakecity55
lakecity55's picture

Barry can just make a Trillion$ Platinum coin and solve this crisis.

Wed, 01/29/2014 - 23:04 | 4382944 Joseff Stalin
Joseff Stalin's picture

It would be easy 4 them 2  mint Pt & Pd coins.

Wed, 01/29/2014 - 13:08 | 4380224 Frank N. Beans
Frank N. Beans's picture

kolapse beetchiz

 

Wed, 01/29/2014 - 13:20 | 4380230 Dr. Engali
Dr. Engali's picture

Maybe instead of Ruble they should call it rubble.

Edit : Amazing. Look at all these Putin lovers as if he is any different than any othe fascist head of state.

Wed, 01/29/2014 - 13:22 | 4380311 BandGap
BandGap's picture

It's a short hop to bubble.

Wed, 01/29/2014 - 13:48 | 4380403 earleflorida
earleflorida's picture

spoken from a true cold-war warrior!

Wed, 01/29/2014 - 13:57 | 4380456 Dr. Engali
Dr. Engali's picture

Do you really believe he is giving Snowden asylum because he is some great defender of freedom? No, he's doing it because it helps him on the world stage. But in the end he is no different than Zero when it comes to the desire for power. The fact that there are so many Putin worshippers on here is stunning. They are no different than the Obamabots. I for one am wary of any person seeking power.

Wed, 01/29/2014 - 14:03 | 4380500 Bearwagon
Bearwagon's picture

Yeah, I remember standing at the Berlin Wall, staring at an graffitti that read: "Enjoy your last can of Coke for the next 5000 miles!" Not that much has changed since ...

Wed, 01/29/2014 - 14:22 | 4380579 kralizec
kralizec's picture

He's popular among some because he likes to bitch-slap Barry.  Well, umm...duh?!  Who wouldn't like that?  Who can't do that?!

Vlad is the strong-leader type devotees of the cult of personality latch onto, perhaps there is a difference in Vlads bots and Barrys bots in terms of why they support their guy, but you are dead right in the lust for power each have.

Wed, 01/29/2014 - 14:39 | 4380652 Thalamus
Thalamus's picture

I'm sure the asylum had nothing to do with the secrets Snowden has/had possession of either.  

Wed, 01/29/2014 - 15:07 | 4380755 earleflorida
earleflorida's picture

?

??

???

Russia would very much like to be an industrial/ manufacturing (geography and demographs don't help) powerhouse... rather (other) than compete with the world's MIC's, and or's?. Putin see's progress not through military brinkmanship with the ussa, but using its leverage?!? Vlad (as i like to call him) knows a 'one-trick-pony' in todays complex'd evolving economies must diversify and be flexible to change as the globe trots from desktops, laptops, tablets, to all-in-one smartphones etc., etc., gadgets, as we'll as molecular/ biological science.

Note:   There is, and currently are great promise for Russian 'Thorium Nuclear Reactor's' implementation in the near future.

Lastly, the Russian's aren't the Leninist/ Stalinist lovers of old too be sure! They realize that oil, gas, and natural resources aren't the panacea for a prosperous or existential future, unless their leaders are pragmatic, and forward looking as is  ( not a bad leader for an ex-kgb officer) Putin!    

Wed, 01/29/2014 - 15:13 | 4380845 Flakmeister
Flakmeister's picture

Yet another Putin apologist.... 

Call me when the Russians fire up their Thorium based fuel cycle reactor....

\facepalm

Wed, 01/29/2014 - 15:33 | 4380998 SDShack
SDShack's picture

Absolutely right Doc. Sociopaths never change.

Wed, 01/29/2014 - 16:01 | 4381173 lakecity55
lakecity55's picture

I think the deal is Putin wants a strong Russia.

Bath House wants to flush the USA down the toilet.

Nobody like a "leader" who betrays his own country.

But, since he is not an American, Bath House has a clear conscience at night.

Sun, 02/02/2014 - 07:55 | 4393163 kashey
kashey's picture

Putin doesn't want strong Russia, if he does anything good for Russia it is only in limits required to safeguard interests of Jewish oligarkhs who have stolen our national wealth. Stability but at minimum cost, I mean just to keep people under control.

Wed, 01/29/2014 - 23:39 | 4383028 jerry_theking_lawler
jerry_theking_lawler's picture

dr E....I'm not a supporter of Putin....but I am a fan. Why? Because he does things to the Zero that I wish I could....he punks him out on a world stage. he keeps him from forcing his will upon other countries with little to no disregard (Syria). and he gave a US whistleblower (Edward Snowden) asylum.....

yes, I know he is an evil man. yes, I know he is looking for his agenda....but at least there is a counter force to the 0.......

Sun, 02/02/2014 - 07:59 | 4393171 kashey
kashey's picture

I strongly oppose Putin. But I would neve gave up Snowden because it's a matter of national pride - if somebody innosent seeks your support you must grant it, it's a moral issue.

Wed, 01/29/2014 - 14:20 | 4380573 Volkodav
Volkodav's picture

Better worrie about your own country...

Wed, 01/29/2014 - 13:09 | 4380231 skipjack
skipjack's picture

Makes gas cheaper for the EU

Wed, 01/29/2014 - 13:09 | 4380233 superflex
superflex's picture

In Soviet Russia, ruble collapse you.

Wed, 01/29/2014 - 13:10 | 4380239 falak pema
falak pema's picture

Putin must be bad at running his economy; if the Sotchi budget is anything to go by (Hmmm, oh those kickbacks!)

Sitting on Gazprom and with the Ruble acting like rubble!

Wed, 01/29/2014 - 13:33 | 4380347 Titus
Titus's picture

If you pocket 1/3 of the budget, you're not necessarily bad at running the economy.

In the end natgas will be traded for euros, so the secretaries are outpriced in the race to buy Louis Vuitton, but do the Oligarchs care?

This is just speeding up the inevitable collaps of fiat - one currency at a time.

 

Wed, 01/29/2014 - 13:12 | 4380251 youngman
youngman's picture

The two tourists should like the better exchange rate....they can buy a cuddly bear or something as a souvenier..cheaper

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