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Russia Central Banks Scrambles To Halt Plunging Ruble, Spends Over $2 Billion In Last Three Days As Inflation Soars
Recently, not a day passes without the Russian Ruble hitting new record lows against the US Dollar due to a combination of both capital outflows from Russia, tumbling prices of crude - Moscow's most important export - which deteriorates Russia trade and current account position, coupled with the most acute USD strengthening in history in the past few months over fears of a tightening Fed.
Yet for whatever the reason, after stoically ignoring the impact of its tumbling currency on the domestic economy (and as a reminder, Japan would kill for a currency collapse of this magnitude: just think of the "economic renaissance" that would result if only Abenomics was right about killing your currency leading to growth... which it isn't), the Kremlin is finally starting to feel the pinch leading to the biggest central bank intervention in FX markets since the start of the Ukraine campaign, buying Rubles for a third consecutive day at an amount of over $2 billion, with $1.75 billion purchased in the first two days of the current intervention attempt, and another $420 million in foreign currencies sold overnight according to Bank of Russia data.
Elvira Nabiullina, chairman of Russia's central bank, sits and listens
during the VTB Capital Investment Forum "Russia Calling" in
Moscow, Russia, on Oct. 2, 2014
Bloomberg adds that the bank also said it shifted the upper boundary of the currency’s trading band by 5 kopeks yesterday, a move that may have taken its spending to $2 billion in the past three trading days. The exchange rate was little changed at 44.7546 versus the dollar- euro basket as of 12:01 p.m. in Moscow today.
The currency sales underscore the price President Vladimir Putin is paying for his country’s annexation of Crimea and alleged support for rebels in eastern Ukraine. The U.S. and Europe have imposed sanctions on Russian individuals and companies that have curbed access to overseas financing and fueled an exodus of foreign capital just as a drop in the price of crude oil saps export revenue.
“The declining oil price and local demand for foreign currency force the central bank to intervene and move the band,” Dmitry Polevoy, the chief economist for Russia at ING Groep NV in Moscow, said in an e-mailed note. “Only the tax period can alleviate this tension.”
The Bank of Russia will probably need to spend as much as $30 billion by year-end to slow the decline in the ruble, which lost 14 percent against the dollar last quarter, according to UralSib Capital. Crude oil, which brings Russia half of its state budget revenue along with natural gas, fell 1.5 percent to $90.76 per barrel in London, the lowest in more than two years.
The net impact of all this intervention has been a 10% decline in Russia's FX reserves, which have fallen by the equivalent of $55 billion in 2014 to a four-year low of $456.8 billion last week, poised for the biggest annual decrease since 2008, when the cash pile slid $160 billion from an August peak through year-end amid central bank efforts to stem the ruble’s drop.
It is likely that USD demand will increase in the coming months, putting more pressure on the Bank of Russia: as Russian companies contend with $54.7 billion of debt repayments in the next three months, according to central bank data. Local tax payments in the second half of the month can support the ruble as exporters convert their foreign-currency revenue.
Meanwhile, as much as Russia wants to telegraph that western sanctions are not hurting it nearly as much as they are Europe (where the recent escalation in political hostilities between West and East has undoubtedly accelerated Europe's tumble into a triple-dip recession), the reality is that they are. A quick example from BBG:
There are many ways to measure the deepening financial crisis spreading across Russia. The ruble is sinking more than any other currency in the world, foreign reserves have plunged to a four-year low and the economy is teetering toward recession.
Galina Mityaeva measures it in centimeters.
The half stick of braunschweiger sausage that the 69-year-old retiree used to buy for her husband each week is now just too expensive. Cut it a little shorter, she instructs the deli counter clerks at the supermarket she shops at outside of Moscow -- a quarter stick will have to suffice.
“Every time I go to the store, food is more expensive,” Mityaeva said as she strolled through the grocery aisles on a recent afternoon. “People are angry right now. In the store lines, you can hear people complaining: ‘What can I afford to buy with 1,000 rubles?’”
Seven months after President Vladimir Putin initiated his foray into Ukraine, triggering international sanctions against Russia and the capital flight that has fueled the ruble’s plunge, consumers across Moscow are feeling the squeeze. Annual inflation soared to a three-year high of 8 percent last month, led by a 17 percent surge in prices on meat and poultry, 28 percent on tobacco and 13 percent on international airfare and travel-related services.
The plunging Ruble is impacting increasingly more ordinary people:
Natalya Lomteva scoffs at the idea of taking a trip abroad, which she calls “impossible to afford.” A 20-year-old college student, she’s more focused on scrimping together the money to fund her pack-a-day smoking habit and finding restaurants that she can still afford. With temperatures dropping as winter approaches, an inexpensive place to gather with friends indoors takes on added value, she said.
“During the summer, we could at least hang out at parks,” Lomteva said while nursing a cup of tea at a coffee house that she called a “cheap option” in the northwest Moscow district of Shchukino. She said that one of her favorite haunts, Beverly Hills Diner, has become too expensive after rising food costs pushed up prices on a menu dominated by hamburgers and other American-style fare.
And yet, the irony is that despite the people's hardships, Putin's popularity is still the highest it has ever been: "His approval rating rose to 86 percent in September from 65 percent in January, according to pollster Levada Center, which surveyed 1,600 people across Russia over four days."
One wonders if this is due to Russia's innate (and historically proven) ability to handle misfortune far better than the west, or simply people are happy to suffer out of spite if it means that their adversaries will suffer even more. For now, this angle is working, because a recession in Europe should more than offset a recession in Russian, if only through the prism of nationalist pride. Additionally, Russia's key opponent, Ukraine, is not doing any better as shown by these two headlines that just hit the tape:
- UKRAINE DEP FINANCE MINISTER MYARKOVSKIY FIRED, IFX SAYS
- UKRAINE ACTING ECONOMY MINISTER MAKSYUTA FIRED; IFX SAYS
And yet one wonders how much longer Russia can sustain this: the best confirmation that things may be spiraling out of control for the Kremlin comes from Russia's finance minister who said on Tuesday the country could no longer afford a multi-billion-dollar revamp of the armed forces approved by President Vladimir Putin, stepping up a campaign to trim spending as sanctions over the Ukraine crisis bite.
Anton Siluanov said a new defense program should be drawn up to take into account the changed economic situation, even though the deputy prime minister in charge of the sector has been ruling out any cuts in military spending. "A new defense program will be prepared now, and in its framework we want to reconsider the amount of resources that will be spent from the budget in order to make it more realistic," said Siluanov, appointed three years ago after his veteran predecessor, Alexei Kudrin, quit in protest over the proposed military spending.
Siluanov's comments highlight a battle among different factions of the government over defense spending which has heated up in recent months, and which will ultimately be resolved by Putin himself.
They could indicate the president is preparing the way to postpone or trim some defense spending, foreseen at 23 trillion roubles ($576 billion) in the decade to 2020 under his original plan to upgrade 70 percent of military equipment by then.
"Since all such final decisions are made in the Kremlin, the decision about fine-tuning of the program will be made in the Kremlin and opponents of the finance ministry's proposals to adjust it will have to obey," said Ivan Konovalov, head of the Moscow-based Center for Strategic Trends Studies.
In other words, the sanctions foreplay of the past year is finally coming to a head, and very soon one party or the other, either Europe or the Kremlin will have to cry uncle. That event, and what follows immediately after, should be the most interesting development of the next 3-6 months.
And even then, a worst case outcome for Putin, one that involves a currency crisis, may be a blessing in disguise, because at the end of the day Russia still has what everyone needs: energy. The only question is how it is denominated. And if anything, this ongoing capital account crisis, will merely force the Kremlin to accelerate its shift away from the Petrodollar to the Gas-o-Yuan (as dubbed here first), as Russia has been hinting for a year it would do regardless. Perhaps a little incentive to pull the bandaid is just what Moscow needs...
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Happy Birthday Vlad!
- The fed
ELVIRA!
That's the wonderful thing about having reserves isn't it? Russia's debt to GDP is about 20%. They have reserves and cash flow from energy. The US has debt and unfunded obligations. Oh, and a printing press...
and who is winning?
Putin should launch his missiles.
Mr Kruschev said he will bury you...
I don't subscribe to that point of view...
The Russians love their children too.
What choice does Russia have? USA has surrounded them and is intent on taking their government down and installing a puppet. Better dead than Red, White and Blue.
Hold off on the nukes Vald........we'll sit down talk to them.
It least give us a shot here.
Take oil to 40 and a nice broad crash to halve all commodities and it's over for the little man.
At the pump - winning!
This is not a bad article.
Good to see ZH post this.
Just keep poking 'um with a stick, Obama..., something WILL happen.
"Recently, not a day passes without the Russian Ruble hitting new record lows against the US Dollar due to a combination of both capital outflows from Russia, tumbling prices of crude - "
Funny one. In reality: due to strategic economic currency assault ...
Spend billions to buy gold, partially back ruble with gold, announce plans to fully back ruble in the near future.
Throw Communist Manifesto in trash, read Libertarian Manifesto.
Free up the people, watch economy grow like early America.
Watch US implode.
Stay strong Vlad.
"Stay strong Vlad."
Good luck
Don't underestimate the ability of
the NWO(or whoever they are) to
mess with Russia and China.
So true.
Worse than a cornered rat: a cornered neocon psychopath.
The effect is just like the current Iranian (and former Iraqi) sanctions: the U.S. seeks to punish the average Russian and make their lives miserable even though they have little to do with Russian government policy. It's mean-spirited at best and constitutes a crime against humanity by a number of measures. The U.S. government has been Israel's bitch so long that Stockholm Syndrome has set in - evil has become a trait to be admired and policy is marked by a callous indifference to human misery.
The three most dangerous things in the world are either a cowardly and weak U.S., a cowardly and weak Russia or a cowardly and weak China. Dual-citizen U.S. congressmen forget that attempts to bully Russia into economic weakness will not make the Russian government or people cowards. Just the opposite, in fact.
The traitorous dual-citizen congress continues to corrode the U.S. image everywhere in the world, turning the U.S. into a country both cowardly and weak.
"and who is winning?"
Um, Russia? They can stand hardship, beyond the lack of Chessy Twiirls in Walmart at a Dollar a pack?
lol for the west its nothing but cheaper fill ups...
Russia is totally insignificant in every way,. although the amount of posts on ZH seem to try to make up for that
Russia is totally insignificant in every way
I hope Santa brings you "The Grand Chessboard" for Xmas.
+1, Duffy. Russia is for sure not insignificant for us europeans, and this counts doubly for us continentals and four times that for eastern europeans
of course, question is if "The West" is defined differently, then some seem to use it more and more for the US and the UK only. but then this leads us to the Middle East, where Russia is again for sure not insignificant
Europeans should take a third way concerning Russia and the US. Play one against the other to change their behaviors - though mainly the US and its hegemonic drive.
Europe is still the crown jewel of the world but continuing to be a hireling of the US will end that, just as it is destroying Japan.
But we do win when it comes to tan suited leadership. No doubt tan pant suits for the traveling sisterhood are available as well.
"Winning" is a relative term, and it assumes that there is something (ie: a contest, prize, status, other) to be "won". Which stage of the game are we at? What is the goal? What is to be won?
The fact is, Vlad is right in that all the world economies are completley tied together. You think this speed-bump is going to bury Russia long term, and that Europe/US are going to get through unscathed, or "win" some kind of contest here? If Russia goes down, they are all going down together. The contest then turns to who can take the most pain, not necessarily something I would put my money behind Europeans or Americans on.
Frankly, Russia seems to be holding up fairly well. They are paying 8% food inflation? Have you bought beef at a US supermarket recently? I guarantee, it is at LEAST 8% higher than last year's price. Eggs? Fruit? Vegetables? WE are inflating food at 8%, make no mistake. Wage growth? Where?
Sure, we have a printing press which we've been smoking for the past 6 years. This won't work forever, and we have no idea what the unintended consequences of using it, to this degree, are or will be. Sure as shit, we'll find out....but who knows when.
With Russia having drawn down only 10% of its reserves, forming alliances with China, having the nuke deterrent, and sitting on massive energy and gold supplies, the "game" is so far from over, trying to pick out "who is winning" at this stage is somewhat a waste of time. Too many factors at play, much more to come......
At current inning, the US is winning but the game is not over yet. We are only in the 2nd inning.
Vladimir, listen to me. You have to come out and state that you are using your US trash collection of dollars to buy gold and that you will also provide some gold backing to your rouble.
Dude, none of them hate the system or working against it, they just want a larger share.
Bingo
Bongo. They want IT ALL! That's what "chosen people" are entitled to.
There is a difference from "wanting it all" to "wanting what others have"
And then there is "if I cant have it than nobody else can either."
Or, as Ana Ng says so well, "I don't want the world. I just want your half."
When it becomes clear to Russia that the vultures are not just swirling around but actually swooping, just watch what happens.
The Queensbury rules will be put to one side and I believe an opening shot may be a combination of gold buying openly and the targeted bombing of either Ukraine or some other trouble making region.
I wwonder how much this ruble buying will put a crimp on the Gold buying. That in addition to the oil price drop must be limiting the Gold Buying. Of course the US is helping out as much as it can....
it would benefit Russia if something happend to Qatar and KSA oil flows...
lol they export gold.. it's like the 1 of 3 products they have in their economy. (just check what zh is trying to sell every other article)
Isn't once state like Cali 10x littlemans land
Now, go check Russian government-owned companies' debt - you are in for quite a surprise. I am talking about the Rosnefts and Gazproms, which have recently been cut off from the Western capital market. I am looking forward to seeing them refinance their debt. Yes, there is China, but they will charge interest in square kilometers of that land in Siberia that holds all the natural resources. Happy birthday indeed, Huilo!
Western capital markets of what, worthless fiat. Its the technology and machinery that matters. For the most part the Russians and the Chinese have it. The Westerners are more in need of the markets. So shit made in the west is more expensive. Last time I checked Russia was pretty self sufficient. They can get alternative products either made at home or in China. And they have oil to give the Chinese for products they need.
So that Russian chick cant go to Europe for vacation, she can go to Crimea, its just as nice if not better. Produce can come from countries that trade with the Russians in roubles. like Iran and South America. Lots of good tropical fruit coming out of Cuba and Nicaragua and Brazil and Argentina. The Big bite of inflation will be with Cali going down the tubes as a breadbasket for the USA. Most Russians will hunker down and go into survival mode when they realize its a fight for the very being of their nation, and they can outlast the angry mobs in the USA which will be rioting and burning down stores when shit hits the fan here
prosto idi nahui
Actually shit has already hit the fan, look at Detroit, look at the riots in Ferguson (not to mention the riots in LA which were all economical ie the opportunity to loot), look at the thousands of body bags coming from the middle east. Look at all the suicides in our military. Look at the cops stealing the cash out of your car. Look at the high poverty levels here. They say 30 percent of the kids in the USA go hungry to bed. Look at the cesspits of corruption and decay in every corner of this nation. But your mainstream media will never play these stories, its always stories about some chick that cant eat out as often in Russia at some American named restaurant, constant song and dance routine from rooftop fiddlers. Know who owns your media and you will understand what the game is and for whose benefit its for. Lots of business opportunities out there, why the need to establish a monopoly in media? Not just in this country but everywhere? Why did Comcast pay Chelsea 600K a year for farting in the wind. Was it because Clinton allowed them to expand their cable empire while he was in office? You are given a list of candidates to choose from how? Because TV puts up a few pregroomed shitheads in a debate and says these are your choices.
I found your comment to be an illustration of a daily soundbite is in Comcast, Fox and CNBC-land. Like you say, to a large extent, the media is basically coopted everywhere. Generally, I try/not to pay attention to media which is less intrusive in terms of dictating which issues are of relevance to me.
When Russia Today reporters resigned, due to a 'professional ethos' conflicting with pro-Russian bias. The only person I discussed this with couldn't understand why I would even read anything on RT, and turned back to reading the Independent online. Because two reporters resigned from one media network, then this media network is less credible than other media? Funny how this was brought to my attention via the Independent online. And where is this reporter going to go to next, the BBC, CNBC, Eurosport, CCTV? ..
Every kind of mass-media has spin and a subliminal message.
well stated. +1000
1. Western Europe still has FAR better capital stock in terms of technology. See: Germany. The Netherlands. In Asia see: Japan.
Their capital stock in factories is vastly superior to anything in most parts of the world. However, they will probably be forced to auction off their rights to that tech. for a song when the debt markets poof. China might get Japanese tech. Russia will probably get W. European tech.
2. The shit has not even BEGUN to hit the fan yet. The stuff you are seeing right now is a teaser for the main event.
Cuba can't even produce enough food for its domestic population let alone supply Russia.
http://wikileaks.org/gifiles/docs/26/2608061_-os-cuba-food-econ-08-07-cu...
Sorry I dont buy any shit comming out of Stratfor. Just look who founded that company/think tank.
Most Russian chicks are hot. I guess they aren't qualified to run their Fed due to the fact they have a soul.
Missing is what happens to all the other oil export economies with oil decreasing in price. Saudis? What happens when oil is no longer priced in dollars. This article appears to impart information but is isolated in what is missing.
Russia doesn't have a low debt-to-GDP by choice, but by force. When it defaulted on its debt in 1998, it found that no one wanted to lend to it for anything approaching 'normal' rates. It's currently running a deficit - due to get bigger if oil continues to trend lower - and has had to sell some bonds. How much did it pay? Over 9%. Why? Russia's proven it's a poor credit risk, and so the market prices loans to it accordingly.
Russia's burning through hundreds of millions in currency reserves daily. Were Russia to stop defending the Ruble, it'd be far weaker than it is, already having fallen precipitously. Russia will doubtless burn through a significant portion of its reserves. Likely, at some point Russia will choose to simply abandon the defense of the Ruble when it becomes too painful to continue.
Factor in increasing oil supply from US sources and falling demand as worldwide oil demand also falls, and oil prices are looking pretty tepid for Russia. Given that energy is the biggest component of the Russian economy, it's not hard to see where this is headed...if Europe can keep their resolve for sanctions.
I wonder if she gets wild after a couple shots of vodka?
Hillary? Only when with Huma??
Huma has been through some crap.....don't know how she does it.
We are all Weiners??
He had her at Carlos Danger.
Turns out she wasn't the only one.
"Hillary?, she's eaten more pussy than I have"
......Bill Clinton...
Mehh; they'll just print more currency and not tell anyone about it.
The they'll use it to jam the markets down by selling unlimited amounts of futures contracts.
Oops. wrong country.
O they will,. I'll wait for 1:200 on the little man faced bills, its a dictatorship right so they must have little man faced bills? ... ya daddy gonna wipe his ass with little man bear pig chest face
..but...but...but, I thought those Russians were so smart and were going to crash the Dollar and make trade deals with China and buy lot's of gold, and..and...and...
curious.
they have been making deals with China [and Latin America, and India, etc.] and have been buying gold.
As to crashing the dollar, no one ever said Russia could crash it, and besides, Washington is doing a bang up job all by itself.
Or maybe we really can print forever and spent 8, or 9 percent and growing of GDP on interest carry, forever. We just need to make sure most of the oil is sold in dollars, eh?
That's gonna be expensive...
Keep a close eye on the November Swiss vote to back the Franc in gold at 20%. I believe this is the Rothschild plan to reintroduce gold into the monetary system to bring normalcy back to 'money'. Russia is in the club and will use the Swiss vote to justify partially backing the Ruble with gold as a response to avoid hyperinflation. The process will be gradual, over years starting at say 10% gold backing and then as the gold price rises as a result of each backing increase the total backing will become a global floating gold price and a total M2 backed by gold over multiple reserve currency's regulated to reflect the moves in gold price from production and trade settlements.
mmhh... don't know. that Swiss referendum would forbid their national bank to sell gold, for whatever reason. but the whole point of a national bank to own gold is as a reserve. in order to buy it's currency back when it's "too cheap" and gold "too expensive", in short, to do what in this article the Russian national bank is doing with USDs: selling them and buying Rubles back, and so keeping the Ruble stable
so that referendum is actually anti-gold, in a "Rothschild conspiracy plan" way, as end-effect. but of course, yes, it would mean that for a while the SNB would be buying gold (instead of EUR) with CHF
but then it would make the CHF soar, and Swiss industry and tourism cry very loudly... so I don't put much hope in that referendum, except if it's timing is exceptionally well suited to a scramble back to currency strenght, the other leg of currency wars
I think we can all say Russia will come out of this OK. Mind you the aim is war so at some point we'll get it. I can't help but think that oil prices dropping is being in part engineered to put pressure on them too. We know markets now are wash traded mirages after all. The funny thing is in that regard the West, as they are doing with sanctions and pressure is shooting themselves with the nail gun too. Why? Allies like (I)S(IS)audi Arabia need high oil prices, and in the US - where the pundits can't brag about oil production enough - need high prices too because Horizontal wells are expensive and in more than a few cases our domestic oil trades at a discount to WTI and Brent.
Inconvenient reminder that hitler has a famous speech detailing the nefarious meddling of the US that will march the world into war, and the US had Japan economically by the balls before pearl harbor.
They had them by the balls with regards to Oil access. Russia has all the oil it wants. The outcome will be different. I dont give shit about fiat. All that matters is getting that gallon of gas or diesel in your tractor or car or plastics manufacturing plant etc. The Russians will have access to all the dollars they need via the Chinese, one great way for China to get rid of dollars and to maintain the two vs one play against the usa
Soft commodity prices for energy do negatively impact russia short term and saying anything to the contrary is silly. Sure FIat this and end the fed that, but at minimum the west is causing some unrest in Russia and at maximum they will cause some economic chaos. Ultimately Russia will be fine, I agree and long term given their resources they are better suited for success than most western countries.
Just like the impending price rise of gold and silver though, all the poetic waxing doesn't change the fact that the asshammers in our halls of government can make shit tough on people who do the right thing for longer than most would guess.
ECON Warfare
As waged by Oligarchs/FED/Bank Cartels
War by other means, who will crack first.....
Start swapping UST for RUP Vlad.
Putin, first needs to sit down and identify what he needs the USDs for and then identify which of those he can do without.
Then retreat, regroup and reorganise his gas business from grassroot level, rather than just trying to blow it up EU's ass.
The world is a big place and he should have done that already rather than leaving himself all exposed to USD manipulation like this.
Vladimir, just convert a couple of billion of your cash to physical silver.
Job done.
Then he will have all the Silver and still short of USDs.
And Vladl thought the war was going to be fought with guns and such. That will be much much later.
The Russians have dealt with a "plunging" ruble before. Time to ask for rubles in exchnage for all Russian oil and gas. Going to be a long winter for the E.Z.
We'll see. I wonder why they aren't doing this right now.
They are waiting for it to actually get cold first.
Why, I'd guess simply because the russians have been in a corrupt "barter economy" since 1990.
If they don't (and the Russian government has very low debt) that barter economy comes to the U.S.
Not sure if I'd call it "winning" exactly. America's prisons are bursting at the seems and the .gov is over-indebted, wages are not growing, so neither is the tax base. I guess we might get to find out if debt does or does not matter. I contend that there can be only one "Japan" as it were.
the have low debt because they periodically default which is what they should do immediately to all gubbermint/corporate/private external debts. turn your bond payments over to the kremlin bitchez and watch the joo bankers have a hissy fit.
All debt eventually has to be dealt with, period. At least they actually dealt with the debt, Americans have not. As I said, the majority of Russians are already use to living under a corrupt as shit government and operating largely in that environment and barter economy. They have been doing this since at least 1990. Americans, not so much. Chinese and Saudi interests are buying up the West, should they offer Putin Rubles for those resources, game over, period. International trade is the only thing that matters.
Same as it ever was...
Just seems that if Russia wants to stabalize the RUP, then swapping UST into RUP and requiring payment for nat GAS into RUP.
Because Russia exports raw materials and not finished (value added) goods, it seems like an overvalued currency would be benefiical. I don't understand why the RUP is doing so poorly when the Ruskies have so many options to restrengthen it.
The people I know in Russia are doing quite well. All American-educated, living back in Russia, their small businesses are booming, so I suspect this may simply be another propaganda piece as well.
russia imports for $400bln per year
russia exports mostly raw materials for aprox the same amount
any plunge in oil and gaz prices make russia net importer
As to the why their central bank decided to support rubble:
most major enterprices and banks in russia are heavily in debt in foreign currencies (primarily USD). falling rubble makes debt repayment for them impossible, they need stronger rubble to be able to repay their debts
Russia should just suspend all bank and major enterprise repayments to the Euroshits until all sanctions are lifted. Why should it pay the thieves.
please explain what "Euroshits" stole. I remember the Russian Bear biting up a piece of a sovereign, lately, but even that is not called stealing, the word is "annexing"
The cognative dissonance is mind boggling. Still can't get an answer to what should be a simple fucking question. Why should that Russian debt have to be repaid and all that western/E.Z. debt not repaid.
The "all animals are created equal, but some animals are more equal" arguement always leads to revolution. History is very clear on this.
All debts will be repaid but with what and how. The Russian problem is much of their debt is in currencies they can't print whereas the FED can print whatever they need.
So thier debt matters and the debt of the U.S. government does not? Good luck with that logic. Folks I know in Russia are doing just fine.
My ex-girlfriend is Russian and lives in Siberia. Sure, energy is cheap there and despite -40 degree Celsius temperatures their homes are always warm. But for the rest, life in Putin's Russia is NOT a walk in the park and many here on ZH need to get their heads screwed on, before they start kissing Putin's ass and start saying how wunderbar he is and how smart.
There's nothing smart or refined about a kleptocracy enforced by a huge secret service.
There's nothing smart or refined about a kleptocracy enforced by a huge secret service.
But you see, CNN and FOX make it look smart and refined - as to the kleptocracy enforced by a huge secret service that gives all its raw data to Israel...
go back to sleep...
For the rest its not a walk in the park, you must be refering to the mofos in Detroit or Stockton?
There's nothing smart or refined about a kleptocracy enforced by a huge secret service.
are you referring to russia, or the usa?
Both - All 'developed' nations really are to some extent.
"There's nothing smart or refined about a kleptocracy enforced by a huge secret service." -- Are you talking about Russia or the alphabet soup of american agencies with their hands in your wallet?
I am confused, I thought you were talking about Russia?
Because pooty poot is a nwo oligarch.
dude - I think Alex Jones just posted a new vid.
You should go see...
I'm not an economist so i just wondered this myself from a layman perspective, if russia would start demanding rubles for oil/gas that would strengthen the currency as it would increase demand for it, but what would be the downside of it ?
Bluffs are called.
I think people still want to play poker.
The downside would be it wouldn't have as many buyers. Folks don't want to hold Rubles today, with the value falling precipitously day to day. Russia realizes it's untenable, which is why it hasn't happened.
Russia is probably today not worried about a plunging ruble. With the new BRIC's Gold back trade settlement currency being prepared in the wings, Vlad's next move might be checkmate to the west.
Barely middle-game. End-game is far off.
Bob, you're the king of non-sequiturs. The head of any country - even a tyrant - is concerned about the value of the coin of the realm. So yes, Vlad is concerned. Can he do anything about it? Not really. We just need to see some tough Russian resolve as the value of the Ruble continues to plummet...and Russia reluctantly sells its oil for even less...and the Russian economy enters another recession.
It's going to be a long, cold Russian winter. :-)
"Dealt with"? Heck, they've outright caused their own Ruble problems in times past.
No doubt it will be a tough winter for the EU. However, between falling oil prices, a new recession and a falling Ruble, Vlad's going to have his hands full. It's going to be fun to watch.
As if the FED is really in charge of anything other than the collaspe of an economy, its own.
Maybe time for partial gold backing.
its comin...
Vlad knows whose behind this shit...
meanwhile from the "home of the bankrupt"...
"The worlds’ biggest hotel operator Hilton Worldwide has sold the iconic Waldorf Astoria in New York to a Chinese insurance company for nearly $2 billion, a record for a US hotel. The deal marks the continued Chinese real estate shopping spree in America.
Hilton Worldwide Holdings sold the historic landmark to Beijing-based Anbang Insurance Group for a record breaking $1.95 billion, which is the largest acquisition of US realty by a Chinese buyer. The hotel will still be operated by Hilton, but is expected to undergo major renovations in the coming years.
Opened in 1931 and offering some of the best views of the Manhattan skyline, the hotel is famed for its elite guest list from US presidents to celebrities like Marilyn Monroe and Elizabeth Taylor. President Barack Obama books the Presidential Suite when he travels to New York City, following the tradition of every US president since Herbert Hoover. Next time the President stays at the hotel, it will be under Chinese ownership.
China will now own 121 Park Avenue, the latest acquisition in the East’s shopping spree in the West. China’s growing economy, stronger currency, and greater access to credit has enticed buyers to invest in the US. “What we are witnessing is the greatest transfer of wealth in human history. America’s wealth, America’s productive capacity, the capital that has been accumulated over a couple of centuries of industrial growth, is being transferred to East. Asia and China in particular at a volume and speed that has never been seen before,” Curtis Ellis, Executive Director of the American Jobs Alliance, told RT.
China is the leading foreign buyer of US properties. According to the National Realtors Association, between March 2013 and March 2014, the Chinese spent $22 billion on US homes, with more than 75 percent of the purchases paid in cash.”
http://rt.com/business/194124-nyc-waldorf-astoria-sale-chinese/
Possession is 9/10th of the law.
I swear they said the same thing about the Japs in the 80s.
That possession thing goes both ways - US/EUR corps have built alot of machines and technology in mainland China . . .
The good thing about the Russian and Chinese possession is that nobody can walk in and take their gold away like what happened in Libya, Iraq, Ukraine etc.
Here come those all of those Chinese held Treasurys right back to NYC.
Fuckin' poetic.
Still sucks for the Chinese. What is to stop the US govt from seizing Chinese assets in the USA under bogus pretenses at a later time. They did it to the Iranians etc... The chinese need to spend their dollars picking up assets in countries they can force to back down from any asset seizures that may happen under pressure from the USA. That is what aircraft carriers are for. Would Morrocco seize Chinese properties if their aircraft carriers are parked in the Atlantic?
Maybe too early to do anything about it. Defense in depth. Think Kursk.
Come on Vlad, peg to gold, we double dog dare ya!
Economic Warfare in true glory now, at what point does Putin retaliate with escalation? at the point his current popularity ratings start to decline?
Food price inflation could be the biggest infliction point?
As strong as a leader Putin is, at the end of the day, if the people cant afford to eat, then there will be an civil unrest on his hands, he needs to respond to stop the rampant inflation.....
"Food price inflation could be the biggest infliction point?"???? Naw it's done nothing here with bacon at $9/lb people just switch to turkey sausage...
The falling currency is a gift, interest rates are high in Russa so haveing the currency fall will help those with high ruble debt. With the bonus that selling USD/Bonds into this "falling" ruble will be seen as supporting the Ruble when it may just be a way of dumping USD/Bonds without distorting or haveing others frount run the move.
Elvira Nabiullina can take a dick, I'll wager...
she can take the greatest americanski dick and she can break it
She is Tatar heritage.
Many Tatar in banking Volga regions.
She's pretty hot. Oh, I'd hit that hard- like a retard with a drum...
He should be selling the UST assets into this UST rally.
putin is a bully.
he needs to stop picking on innocent rabbis.
they are just trying to make a living from bombs and vaccines and new war fronts.
he needs to give ukrainia free gas and pay compensation to israel for allowing the nazi german and hitler to kill over 10 million maybe more not less jews.
he must pay the family of anne frank from holland compensations as well.
the russian goy people should all be moved to northern siberia so the jews can return to sacred oil and gas rich homeland areas of russia.
He also needs to fly into every childs window and deliver a silver dollar under their pillow for lost teeth.
Perhaps he can leave some colored eggs in hiding places around April.
What did you smoke this morning tony?
Yeah, right, everyone knows it will be a silver Ruble, not a dollar...
“Every time I go to the store, food is more expensive,” Mityaeva said. “People are angry right now.”
Yeah, you don't hear that here in the States, do ya?
Propaganda, trying to make americans feel better about the world dumping the USD and moving on. As if all prices must be in USDs.
Who gave the US the right to buy russian property with coupons they print for free.
Sumbody send that nice young lady an EBT card that we finance with printed reserve currency scrip.
Uh oh....watch out Pearl Harbor.
Airline prices in Russia have been increasing due to removal of consumer protection laws. Aeroflot profits have been growing as a result. This is a whole different topic.
20 year old college students shouldn't be traveling. Russia is full of unfettered desire for wealth, especially from dumb young women chasing oligarchs and the luxury life.
Russia recently enacted laws which prevent cigarette advertising and increased the tax. Good. Stop smoking.
If things get pinched enough in Russia, the people fighting for Russia's key economic interests will go after the black cash greasing the wheels. We're not even close to this point.
Until then, the youth in Moscow are still enjoying the mini Renaissance of public works such as parks. Park Gorkovo has become Moscow's central park, so busy that's it's hard to ride a bike through, even on cooler days.
Yea, but did you see those hot shirtless pics of Putin on his birthday? I know ZH'ers love to drop their panties for some Putin!
I know right its like all the zhers turn into female walruses and line up on the beach for the big daddy putin moneyshot in their faces
Maybe its time for Russia to close its airspace to American commercial flights.
And maybe it's time for China to start selling treasuries just fast enough to get people's attention, and use it to buy gold and rubles and maybe some fireworks.
Why? did China forget when the US stopped Russia from nuking them down a bit when the Chinamen got uppity...... hey ya they didn't
I dare you to diagram that^ sentence.
Oh! Ha! Ha! Ha!
Noun? subject? verb?
Public schools no longer teach english grammar or cursive writing.
They do however teach spanish grammar.
You have dated yourself.
I can see a Vlad video in the making right now: Vlad in a suit wearing sunglasses with a Siberian tiger at his feet, whilst he quietly drums his fingers on a big red valve, while casually glancing at his watch. Soon.
Ukraine? Got gas?
Solution: Start minting silver and gold rubles
Why not go the GM route and just issue a recall of 100 ruble notes?
They should not worry about the Ruble. It is not a reserve currency. No one owns any to sell. So it is pure speculation and capital flight. Just buy gold, stay business friendly, stand behind Russian banks. That will fix the Ruble.
Laying off the Ruble printing staff for a month couldn't hurt, either.
Currency wars are heating up.
so are the heating wars.
Same thing happened after the Georgia war. The West was incensed that Russia had the nerve to win, so they made the Russian central bank burn thru almost 1/3 of a trillion dollars worth of reserves in a currency war. Fortunately for the Russians, they had twice that amount before the war started.
" as Russian companies contend with $54.7 billion of debt repayments in the next three months"
Putin should just decree that Debt owned to companies and banks of sanctioning countries is null and void and is forbidden to pay it back. The western financial system would implode while Russian companies would likely be able to borrow from China against russian gold reserves as collateral.
“During the summer, we could at least hang out at parks,” Lomteva said while nursing a cup of tea at a coffee house that she called a “cheap option” in the northwest Moscow district of Shchukino. She said that one of her favorite haunts, Beverly Hills Diner, has become too expensive after rising food costs pushed up prices on a menu dominated by hamburgers and other American-style fare."..
How could any self-respecting Russian after what they have endured in the last 9 months alone with sanctions from the U.S. and the total devastation of their cousin next door want ANYTHING that is even remotely American or American in name?... And I'm an American talking about my own Country!
If I were Russian I'd be banning every cola and fast food service joint, clothes, cars, electronics, investment houses this country sells it never to return in my lifetime. It's personal now and the U.S. certainly as always made it happen.
I think that's why they call it war!
Its called a Lie. Never happed just someone typeing out BS and useing a quote filled story and fileing it. Ever even talked to a lit major. They dont read they only write what you want to hear.
Dont believe anything you read and only half of what you see with your own eyes.
Oh Yeah bbq?...
Well check out "these lies" and please tell me after you've watched them that they are all BS!
http://www.youtube.com/watch?v=2cd7Yibjr7c
http://www.liveleak.com/view?i=e8f_1404341730#0wIcl02AKZyTTBbJ.99
http://www.youtube.com/watch?v=1JFY6Xug6X8
Sorry if I recused the whole Middle East genocide thing taking place at the same time but in the interest of this article and these comments I left it out! After all. How much war crimes witnessing should any American have to deal with in one sitting on any particular "day"?...
After you watch these you can always respond to this comment and tell us you simply forgot the /sarc tag!
The judges of Goloc (Voice... Think of it as the Russian American Idol) never N-E-V-E-R chose candidates who sing other than popular Western Songs.
Russians love Russia. They love Putin for standing up for Russia, and for being a better example of what a Russian man can be than what they've seen in recent decades.
That is not the same as hating the West, or truly believing the Russian Government's "Everyone-is-trying-to-invade-and-break-up-Russia' propaganda.
You can't trust Russian poll numbers. Western politics are not Eastern politics. Western political history is not Eastern political history.
Russians are first and foremost survivors.
When they see the government registrations of bloggers, prosecution of journalists who write stories critical of the government, jailing even rich and powerful men who criticize the policies of the ruling oligarchy... they do the rational thing.
When polled for their support of government and government policies they fall overthemselves competing to be the most enthusiastically pro-government. Their real opinions they keep to themselves. It has been a survival response for Russians for centuries.
Think Russia dumped some gold reserves, too? Gold was up until about 10AM. Then bam, fucking plunge wiping out most of the early gains.
No
My printing press is bigger than your printing press. Russia dumps paper not gold.
I'd do'er