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Putin Rules Out Capital Controls As Ruble Hits Record Lows, "Curbs Risk" By Shifting To Non-Dollar Settlements
Despite ongoing outflows, Russian President Vladimir Putin confirmed earlier statements by the Central Bank ruling out any measures to stop the flow of money from his nation (following rumors that they were weighing capital controls sent the Ruble to fresh record lows against the USD). The central bank continues to make "small interventions" but the Ruble has pushed to new record lows this morning nevertheless, as Bloomberg reports, restating "the first principle is the lack of limits on capital movements." In order to "curb risks" from ongoing outflows, Putin said on Thursday that Russia wants to shift to national currencies in trade deals with China and other countries, implying a shift away from the U.S. dollar. That appears to be strengthened further this morning as Putin signs law ratifying a Eurasian economic union.
Following rumors of capital controls, Bloomberg reports Putin denying any such rumors...
President Vladimir Putin joined the central bank in ruling out measures to hinder the accelerating flow of money from Russia after speculation that policy makers are weighing the possibility of capital controls sent the ruble to a record low.
“We don’t plan to introduce currency restrictions or restrictions on the movement of capital,” Putin said today at a Moscow investment forum organized by VTB Capital.
His comments echo central bank Chairman Elvira Nabiullina, who earlier told the same conference that speculation policy makers are considering limits on capital movements is “absolutely baseless.”
And amid ongoing weakness in the Ruble (new record lows)
The Central Bank is sticking by its principles...
The central bank made “small” interventions yesterday, selling “slightly more than” $4 million, Nabiullina said. “The ruble is close to our upper boundary and we, subject to its moves, will act according to previously set rules.”
Even as the ruble has weakened to a record, the bank has pushed forward with preparations to shift to a freely floating currency, in favor of using interest rates to manage inflation, which has remained above its target for two years.
Nabiullina said capital controls would undermine one of the country’s main monetary-policy achievements.
“On what principles are we basing our policy? First is the lack of limits on capital movements,” she said. “To reject that achievement, truly, may set us back many years.”
As Reuters adds, Putin is looking to further de-dollarize...
Russian President Vladimir Putin said on Thursday that Russia wants to shift to national currencies in trade deals with China and other countries, implying a shift away from the U.S. dollar.
"In the future we aim actively to use national currencies in energy resources trade to settle... international trade accounts, with China and other counties," Putin told an investment conference. "In using national currencies, we see a serious mechanism for curbing risks."
Which appears to be strengthened this morning...
- *PUTIN SIGNS LAW RATIFYING EURASIAN ECONOMIC UNION
* * *
De-dollarization continues...
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Impale the dollar, Vlad.
AND ..the 1st brigade, 1st cav division is being sent to the balkans to join up with the 173rd airborne brigade...and a couple of A-10 squardrons to make it interesting... defense dept. briefing..TODAY!
this just gets better and better
it sounds like "TALES FROM THE DOOM BUNKER"
The problem with economists is they can't decide if a weak currency is good or bad.
Its all good as Putin will be getting even more Rubles for the gas they are pumping to EU
In one week I will be in Moscow, and then I will continue farther into Russia. Thanks for the cheap vacation you central bank control freak douche bags. Don't think that capital flow can't reverse direction in a heartbeat when enough investors smell a bargain.
Yo Vlad,
Make the ruble a gold certificate. Redeemable for physical. Fuck the fixers. You got the petro to push them (ask Germany..about the petro...don't mention the gold...I mentioned it once but I think I got away with it...) and when it decouples you will have that much more leverage...just a thought.
Beats labour certificates....
Good luck with that. Crimea alone is costing a couple hundred billion rubles now. "Hence the overland invasion."
I think people who wish to be taken seriously/of the actual real world are asking the question "what comes after Putin?"
The good news is that ZH will continue to support him since "between him and post Putin stands total chaos" it would appear.
Wow. Ping. Thanks for the nuance.
The problem with economists isn't that they're ignorant, but that they know so many things that aren't so.
<--- Purely by design of TPTB
<--- More reactionary policy shifts
DaddyO
nice try at a redirect
??? It seemed to take me to the page listed.
I bet Putin doesn't allow people with passports from Ebola countries to fly into Russia.
Yep - Just wait till this thing mutates and is able to spread by air. Political correctness is going to pay very nice dividends in this country, very soon. 100 years ago they would be quarantining anyone close to suspicion. We're much smarter now -
I dont know,seems to me this thing is as easily transmittible as the fucking flu...somebody please tell me im wrong...
You are wrong.
I think it already is transmitted by air. The proof ? The doctors took extraordinary measures to protect themselves but came down with the disease one after another. They breath in the virus.
I dont know,seems to me this thing is as easily transmittible as the fucking flu...somebody please tell me im wrong...
Listening to the stories about how fast cases are doubling makes it sound like this, BUT...
I went back yesterday and looked at an old story from a month ago about West Point, in Monrovia, Liberia. How many remember the quarantine they put in place around that neighborhood, which holds tens of thousands of people in the most primitive conditions? Turns out that even when the neighborhood was locked down, there were only about 50 cases attributed, and they released the quarantine after ~10 days.
There are a lot of things about this story that really don't add up. No matter what, the lies are thick, but what kind of lies are they? To hype the threat and advance government control or to hide the threat and maintain government control? Still hard to say.
That's nothing. wait till it is able to spread by commenting on web sites.
I don't reply to anyone from Dallas anymore.
For some reason can't seem to get the uptick to work on your comment, so just take it as +1 from me.
something about italics
Such a sexist, racist, hateful, bigoted remark. It is obvious you are a hater and are in need of MOAR mandatory PC/Sensitivity training. /s
I wonder if $2000 suits and bottles of Bolinger are a good protection against ebola. I think that's what the boys down on Wall Street are banking on.
Sad ending to a 2000 dollar suit of course.
No matter what Putin does, I bet eBola never spreads to Russia.
You know these record lows vs usd are only a few cents we are talking about. . . Even if it was 50 rub to a usd it doesnt really mean much for either nation , this information is only useful if you play forex . . .^^
No. It only means something if you buy imports from the Europe or the US.
USA just trying to destroy all countries - no country - no debt
We could be trying to create NEW countries. (New countries/new debt.). Russia in that regard looks to be very happy hunting ground indeed.
bang! you did not see that! did ya?
The winds of war are blowing stronger each passing day.
wow.
a shiver ran up my spine when I read that.
I thought it was some babe blowing in my ear.
WHoooosshhhh
I used to go with this chick that loved to lick ears.
Wooosh, maybe I am a Ferengie.
More latinum please.
Bullet whizzes past ear......
Leaders always deny things like capital controls, devaluations, etc. just before they implement them.
Yep...
Puppets do, but this is Putin.
With almost a quadrillion dollars of derivatives floating around the world, isn't there a growing potential for a complete global credit freeze / capital control / as the various central banks try to implode each others currencies?
I understand it to be economic-warfare;(
Russia has enormous resources and supplies Europe with the energy essential for a modern civilzation. Result? A weakening currency. The United States floods the world with debt and mayhem, and everyone piles into the dollar. This tells you a lot about the modern monetary system.
Yes.
Russia is like a newly married man whose father-in-law is worth $2 trillion
Blah blah blah, non USD settlements, blah blah blah.
SO basically the traders are placing a trade which says: Russia will lose and US will win.
This is a bit risky considering the that Putin is thinking commodities and NOT financial markets.
Short term US wins, long term, Russia wins, US...
Are you calling upon Americans to prepare for their great battle...with Canada?
Smart move switch from chess to poker
Raise the bet just enough to get a reaction but not over commit. Then watch to see if the other globalist faction calls, raises, folds or makes their next chess move again
Even if you hate the guy you have to appreciate his style of play
classic negotiating from strength. making your opponent react defensively instead of offensively. putin has had the west reeling on its heels from the start. what a great show that deserves a lot of respect. like you said, like him or not, you have to note his brilliance.....and sense of humor.
the dollar value of a currency really doesn't matter if the country has no need for petro dollars. it doesn't really matter that domestic capital(hot money is long gone) seeks higher returns outside the ruble because the profit comes back to russia in the end. the end game is russia and ruble value only matter to the coubntries russia is trading with. in a system based upon currency swaps backed by gold the petrodollar/ruble value mean nothing except that russian caviar is cheap in new york.
"Domestic capital" is not daytrading Amazon and then socking the profits back into Russian bank accounts. It is getting out of Dodge lock, stock, and barrel while the getting is still good and it ain't coming back, baby.
Is it rubles or dollars leaving Russia?
Russia is getting rid of the dollars.
just to add to what tarabel said, capital is always in the hands of the rich, and the rich will always do things in their own interest with little penchant for nationalism or loyalty to a state, any state.
Russia will be dragged through the ditches economically, there may even be geniune discontent in the population due to economic hardship as this drags on.
This will be a long game, it all depends on if they can hold out long enough until the financial house of cards in the west collapses.
I'll bet they didn't boycott, or sanction, caviar.
They can not make this man flinch. He knows what he is sat on and will wait out these storms until momentum favours him.
I'm willing to bet Russia comes out of this in better shape than the USA, although it might take a few years. In the meantime, does anyone know of a non-US/EU fund that invests directly in Russia? Seems to me the time to buy is close, if not already upon us.
You mean like how Iran has prospered without the US's blessing? North Korea? Russia at present is a one-trick pony: commodities. For better or worse, the US is still able to exact an economic price when it sees fit.
China would be a more appropriate comparison. A more appropriate ally too, under the circumstances. Pretty good match actually. Technology on one side, commodities on the other. What's not to like?
The petrodollar works until it doesn't, shill. Exponential debt growth in the US is public knowledge and the game is nearing the end.
On a long enough timeline, the survival rate for Amerikan Patriots drops to zero.
"Russia at present is a one-trick pony: commodities."
I've read this viewpoint before. The New York Times editorial page loves to say this.
What the Hell - we can't even put a decent payload into space without using a Russian rocket. Russians are not a bunch of dullards; they can design and manufacture world-class stuff when they need to.
Hitler underestimated Russia's capacity for technology and manufacturing too. He thought his brilliant Nazi Panzers would roll through Russia like nothing. He wound up with thousands of T-34s pouring out of the Russian manufacturing centers and blasting their way to Berlin.
Quite. I've said it before, each time I look at my Zil I shudder, because it would have been coming the other way. The engineering and design are phenomenal - absolute fitness for purpose. At the time, we were making Stalwarts that can't turn corners on road or they blow the spools, and crummy modified Bedfords (thanks GM, thanks a lot).
The Russians are more than capable on the engineering and tech front. Ever notice how well educated they seem to be? In this country, our "craft,design and technology" classes (used to be woodwork and metalwork) get given cardboard and scissors where it used to be tools bhenches, hard materials, lathes and the like. Pathetic. How can you hope to compete like that?
You have a Zil? Cool very cool!
Smart move by Putin and, as usual, not what Zionistas were expecting him to do.
Meanwhile, here is what is happening in Donetsk….Phenomenal, action packed, war reportage
Tuesday- We need capital controls.
Friday-- We have no interest in capital controls.
Then why did you propose them three days ago?
Because capital is fleeing the CCCP v 2.0.
And why are you now denying that you wanted to impose capital controls?
Because it became apparent that advertising our intention was causing people to hurry up and beat the rush. When things calm down, we will hit the suckers on a weekend like we should have done in the first place.
In chess, this is known as wasting moves and is the hallmark of neophyte players rather than grandmasters.
The meaning of 'disinformation' in Russian is the same as its meaning in English.
I'm going to go with 'head-fake' and not 'neophyte players' (Although Putin would rather I didn't)
Wait till billionaire buds are out...
Good catch on the capital control rhetoric..
Elementary school chess champ myself, but also got the master key to the whole school after hours.
Extra-curricula ed. 5th grade, had the key for a yr and a 1/2. he-he. Double win.
Loved the free kickballs and stuff.
Vlad's intelligence (or lack thereof) hasn't been able to fix the fact that Russia is little more than a commodity economy. For good or ill, the EU and US are able to inflict considerable pain on Russia.
That's precisely what they did with the CA gold dump and oil manipulation down which led to the fall of the Soviet, but also the eventual rise of Putin. He is aware for sure.
Do you reckon that President Putin will give visibility to these USA histories?
http://patrick.net/forum/?p=1223928
The Public Be Suckered
Its going to be very cold in Russia this winter. Its going to snow too
It's always been cold in Russia in winter with no shortage of white flakes falling from the sky.
Russians know how to deal with it.
Nothing new.
We will not use capital controls is the last thing you say before you put on capital controls.
Let's face it, most of us here believe that the elites coordinate events to a far greater extent than what a normal, more mainstream type of person would consider. With that said, one of the biggest questions that I've got is, to what degree are the major heads of state (Russia, USA, China, Brazil, etc) actually playing for the same team? Some believe that Putin is every bit the globalist as Obama, Brussels, etc. Those who believe this point to his support of the IMF, BIS, etc, which, though is evidence along those lines, doesn't entirely mean that he's in line with those organizations since his support of them is still consistent with a weaker USA and West (assuming it leads to an SDR replacing the USD, etc, etc). However, the one thing that really does make me wonder is the gold market. Russia is on the brink of an an economic disaster due to these sanctions (though our media is probably exagerrating this). One thing that he (putin) could do is buy up the entire gold market to f' with the west. It would be legal, cheap, and a huge pain in the ass for the west though it probably wouldn't cause a complete collapse (which nobody in power would want, regardless of what team they claim to be on). This very fact is a huge piece of evidence in support of the theory that all of these turds work for the same parasites at the top of the pyramid.
This is what we all ask ourselves when we finish reading '1984'
Was there collusion between the governments of the triumvirate when they came to power simultaneously after WWII and before "1984'?
Orwell might have thought so..
Or not.
Could the Oceania, Eurasia, and Eastasia of today have agreed to it by themselves, before they took power?
Population growth had to be halted and a portion of the existing population culled. Economic growth must be stopped as it is fouling the atmosphere, ocean and drinking water supplies. And it has placed a unreasonable demand on the limited supply of crude oil.
And technology has made controlling the masses simple.
The Fed has proved the irrelevancy of a currency of value. Government does not tax for revenue. It taxes to keep its citizens poor.
Oh, and if this is what happened before Orwell's novel began, would it have looked much different from what we see today?
all the major world economies are interlocked ponzis thanks to globalisation and free trade. taking down US financial system, banks etc via comex or something else would bring about turmoil never seen before, resulting in the collapse every economy in the world, including russia's. this would be declaration of war. even if some have enough resources and industry to sustain its economy, it would still be societal collapse because without financial systems modern civilisation would stop functioning. banks have made themselves indispensable on purpose.
this argument would seem to support the notion that leaders are not colluding and putin is acting in self interest, but that we just can't know. i'm more inclined towards the concept that all the world leaders (assuming they are the real leaders to begin with) are more than aware who is their real common enemy. which is their own people if they would learn the inner workings of the powers that be.
Yes, the gold possession is what has changed this go round.
Once again, the timing on this announcement is very strange. Why do this on a Friday? They have weekends in the CCCP v. 2.0 as well as in the West. So who is paying attention to this? I mean, apart from the usual brigade of Weekend Footwear Saliva Application Technicians anxious to earn a few kopecks telling each other how brave, wise, smart, and just plain admirable Bad Vlad is.
Unlike the casual observer, their interest is pecuniary, if somewhat misguided since they seem to be rooting for the Rubble (in which their word rate is paid) to collapse even further. Yes, I want my salary reduced in buying power. Yay for Vlad.
But getting back to those who aren't being paid to puff up el Presidente para la vida Puta, er Putin, what should the rational reader take out of this report?
First off, the announcement seems designed to ease capital flight from Russia overall and perhaps to dissuade anybody who was planning on making a decision to ride off into the sunset with diverse bags of money over the weekend. In other words, it's buying time until Monday.
What happens then? Don't know. Doubt if Puta knows either. Depends on how successful the Friday agitprop campaign works out for the CCCP v 2.0. If the prospective capital flighters ease up now that Russia has foresworn its previously announced interest in capital controls, nothing much will surface. If, on the other hand, the multiplied capital exodus triggered by the Tuesday announcement regarding planned capital controls continues, then a swift, perhaps overnight, capital flight regime may be deployed.
Given the rising cost of war in the Ukraine, the falling price of crude, the continuing and increasing Western blockade, the collapse in the value of the Rubble, and the draining away of precious investment capital, Russia is in a very bad spot that is likely to get worse since Russia is now ruled by the only man capable of losing a war with Barack Obama.
Capital flight will continue until such time as controls are instituted. That is the bottom line.
What's with the CCCP v 2.0 thing?
We're still all running with Psychpaths v 0.9
Governments are all basically the same and not without lots of bugs that need shaking out - I mean LOTS.
You're probably right. Unless Vlad relents and realizes it's too high a price, he's likely to soldier on and take the losses as they come.
My family and I had planned on returning to Russia in the next year or two for a visit, but the sentiment seems decidedly anti-American, so not sure if it'll happen.
Vlad's ordering principle seems to be derived from a statement he made years ago: that the greatest geopolitical catastrophe of the 20th century was the breakup of the SU. Viewed through that lens, all his actions in Ukraine and Georgia make sense. Quite literally, he'd like to reconstitute as much as he can of the former SU. The ruse he uses is that he's protecting Russian folks who reside in the former SU republics.
Dear Amerikan Patriot,
V. V. Putin has no intention of reconstitutuing the USSR, as you allege. I see no evidence he wants to revive scientific socialism, the dictatoriship of the proletariat, the expropriation of private property, the leading role of the party, official atheism, or any other aspect of the One, True Doctrine of Marxism-Leninism.
Also, the territories that have been in question over the last decade, Georgia /Ukraine were part of Russia long before the Soviet Union was ever in existence.
The big question in this thread is: how much is Amerikan Patriot getting paid for each anti-Russia comment?"
Funny how you confuse a "ruse" with protecting ethnic Russians AND the supply route of Russia's gas pipeline to Europe. Let's not forget the goal of the US's $5 billion investment in the KIEV JUNTA is disrupting control over this pipleline and area to give the middle east pipeline from Qutar through Iran and Syria a chance to be built. Regardless of the loss of human life along the way.
All those beautiful dead Ukrainian brides make Victoria Nudelman proud. Funny how you don't see them on the news.
If Vlad really wanted to reconstitute the Soviet Union instead of protecting ethnic Russians and economic interests, he would have incorporated Georgia after the Russian military spanked their US-led aggression.
He didn't and hasn't rolled through to Kiev like he could. Instead he's letting the Kiev Junta get weaker in a pile of their own shit every day as winter approaches.
This was said in a context of the Business fair and gathering of the Russian+Assian businessmen.
Therefore on Friday....
The price of gold in rubles is rising.
Does Zero Hedge have a compendium of all the tremendous advantages that accrue to those who join Vladimir as he reconstitutes the remnants of the Soviet Union into a country Stalin could be proud of?
If so, these should be added to the list:
1. Early adopters may get their own gulag to run, or at least be allowed to choose who attends;
2. Early adopters with the proper credentials (i.e., fawning adoration of Vladimir, a/k/a Dear Leader) will qualify to invent 'news' displayed on one of Vlad's captured media outlets;
3. Late adopters will swell with patriotic pride as they dig ditches, blast tunnels and mine for uranium deep beneath the Earth for Mother Russia!
From each according to his ability, and to each according to his need!
Governments are all basically the same.
Repeating myself a bit.
Government is the problem.
There's never been a good one, and I doubt it's even possible.
By the way, I'm a patriotic earthling. I want to improve the planet I live on.
Hi logicalman. Do you see any problems of living a life without a government?
A government that fears it's people can be a good thing.
A people that fear their government are only slaves.
"1. Early adopters may get their own gulag to run, or at least be allowed to choose who attends;"
Wait til this ebola thing gets going stateside and we'll see whose gulag fills up first.
You mean like the millions that died in the US during the swine flu epidemic? The avian flu epidemic? Too early to say whether ebola peters out like those or becomes the Spanish flu of the 21st century.
"Too early to say whether ebola peters out like those or becomes the Spanish flu of the 21st century."
Going by the response so far, I'd say it's already too late, but I guess we'll see.
Heh, the folks who made USSR possible are running the US now, perhaps you should become an early adopter to your FEMA camp bunk to get a good spot.
Why pay any attention to what Putin says he will or won't do regarding capital controls? Talk is cheap (ask Mario Draghi).
When Bernanke said he would never monetize the US deficit, I paid no attention. I didn't hold any credence to Obama's election claim that "Too big to fail ia too big to exist". I don't listen to China's growth statistics, the Saudi's proven reserves figures, Facebook's eyeball counts, Morgan Stanley's earnings statements, BLS labor statistics, LeGuard's latest blather, the CDC's ebola assessments, or valuations of Marissa Mayer's "cool factor". Nope, I just don't trust 'em.
The TV Ford guy says "Now's the time to buy a new Ford!" I don't trust his motives either. I don't think he knows shit about automobiles, even if he does wear a mechanic's coveralls.
Good points, all.
The US lives and dies by the USD.
The US and global debt, money prining in various guises.....the intractibility of a failing US economy.....means the US has started to walk on air....the last thing the US want is global peace....the only thing that keeps the US up now...is the selling of global fear. You wonder why they are scared of gold.
Obama has had ample opportunity to start new wars and finish old wars, but he's largely demurred. Other than drone strikes, he really just doesn't have much stomach for it. Yes, the latest spate of beheadings and public opinion goaded him into the current debacle, but he was hardly chomping at the bit to get in the fight.
Having said that, I agree that the US has a valid interest in protecting its currency. It makes perfect sense. However, given how strong the dollar has become of late relative to other currencies, it'll be interesting to see if that doesn't hurt our exports - and fuel another round of 'beggar thy neighbor' debasement.
Prey tell what exports those might be?