Russia Prepares For GDP Surge As Consumers Scramble To Spend Their Plunging Rubles

Tyler Durden's picture

In the most ironic twist of all amid the "currency crisis" enveloping Russia, we suspect the world's central bankers will be looking on jealously as The CBR manages to achieve precisely what The BoJ and The Fed are desperate to achieve. In raising inflation expectations, The FT reports, Russians are hurriedly turning their depreciating Rubles into jewelry, furniture, cars, and apartments as the currency's collapse prompts a shopping spree that will likely lead to a surge in GDP. As one anxious shopper noted, "none of us know what’s happening. We’re all worried that the currency will keep falling," and so "it’s time to buy furniture!" And sure enough, shopping centers are currently experiencing a spectacular rush.

 

As The FT reports,

Russians hurried to change their savings and pensions into dollars and euros while also stocking up on furniture and jewellery as the rouble’s collapse accelerated.

 

Their mounting concern was reflected on Tuesday morning in the red lights of the currency exchange booths that dot the city, which were ticking over to show ever weaker rouble rates.

 

...

 

“I took out some of my pension and I want to change it into dollars,” said Galina, a retiree, who declined to give her surname. “None of us know what’s happening. We’re all worried that the currency will keep falling.”

 

The dramatic collapse in the rouble in recent days has not triggered outright panic, but it has prompted a rush to change currency and to stock up on durable goods such as furniture, cars and jewellery before they become even more expensive.

 

...

 

"I think the rouble will carry on falling until the end of the year,” she said. “It’s time to buy furniture!”

 

Indeed, shoppers reported enormous queues even at 2am in Ikea on Monday night as people rushed to stock up before the rouble plunge triggered price rises. The Swedish furniture company had said it would be raising prices from Thursday.

 

...

 

"People who didn’t manage to exchange their money at 35 roubles or 40 roubles to the dollar have been buying up high-end goods, cars and apartments because a massive repricing hasn’t happened yet,” said Vyacheslav Trapeznikov, acting director of the Urals Builders’ Guild, in Yekaterinburg.

 

Car sales in Russia rose in November from the previous month — in spite of a slowing economy — and December is “rather promising”, according to the Association of European Businesses in Russia trade group. “Retail demand has been extraordinary in recent weeks,” said Joerg Schreiber of the AEB.

 

...

 

“People are trying to spend their last roubles and buy up things that haven’t been priced, but this trend has an expiration date,” Mr Trapeznikov said.

Russians are lining up at currency exchange centers to swap their increasingly worthless Rubles for Dollars...

 

And as Germany's N-TV also notes, they are spending that money...

Shopping centers are currently experiencing a spectacular rush. The most recent example is the Swedish furniture chain Ikea, prior to their department stores in the past few days with long queues. Several hours had to wait for the customers before they could enter.

 

The reason is that Ikea had announced in early December to try to raise prices in the near future because of the decline of the ruble. While Ikea calmed after its customers that prices would continue to meet the published list prices in the summer. At the same time, the Group achieves in Russia each year well over a billion euros in sales, that its operations were dependent on external factors explained.

 

...

 

"At this point, Russia differs from industrialized countries to save where people start when a crisis begins," says the economist Igor Nikolayev. "For us, this is accompanied by a strong degradation of money and the people spend more, which relaxes the situation for some time," adds the analyst of consulting company FBK.

 

...

 

"People have rushed to buy expensive goods such as televisions, computers, laptops, to save their rubles, which lose value dramatically," says Maria Wakatowa of the consulting firm Watcom, the observed trade.

*  *  *

Simply put - it's all about inflation expectations. And unlike The Fed or The BoJ, who keep trying to jawbone higher expectations into their citizens' minds, the CBR has achieved it and with it - a spending spree before things get more expensive and implicitly a surge in GDP. Ofcourse, however, the spending surge can only be short-term and will stop as soon as there are no more Rubles to spend.

*  *  *

Finally - this seemed to sum it all up nicely...

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ParkAveFlasher's picture

Yellen just howled in ecstasy.

Stoploss's picture

Where is the rioting??  No looting?? Where are the fires??? 

So, their currency is collapsing, and they are ready to "buy" assets, all the while, patiently standing in line, with no businesses burning...

Freddie's picture

I admire the Russians.   Americans are now pathetic.  Being destroyed by the tribe. 

The Juggernaut's picture

Russian people need to purchase bulli's.  Physical delivery, of course.

knukles's picture

Y'all hear that, Janet?
You rush out to buy gold in the open market (for real physical delivery into Your Grubby Little Hands fbo Goldman and JPM et al, fuckers) then everybody'll rush out to spend their depreciating $US and "ici violas!" you'll have your desired GDP boost.

nope-1004's picture

They should all go out and buy vehicles.  That's a hard asset that maintains value, much like real estate. /stoopid

 

Seriously people.  Gold and silver.

 

0b1knob's picture

I thought this crisis was all part of chess master Putin's plan to destroy the US dollar?  Or is this the new broken window fallacy, the BROKEN CURRENCY FALLACY?

Pool Shark's picture

 

 

Weimar Russia?

 

Stackers's picture

This surge in spending of a currency that the public is losing confidence in in mass is exactly how hyperinflation death spirals start. Hyperinflation is a psychological panic that sends the velocity of money soaring as everyone tries to trade it for real stuff as quickly as possible. This could get ugly for Russia in a hurry

BigJim's picture

 As one anxious shopper noted, "none of us know what’s happening. We’re all worried that the currency will keep falling,"

Should have bought gold months ago, honey

The9thDoctor's picture

Russians hurried to change their savings and pensions into dollars and euros while also stocking up on furniture and jewellery as the rouble’s collapse accelerated.

Their mounting concern was reflected on Tuesday morning in the red lights of the currency exchange booths that dot the city, which were ticking over to show ever weaker rouble rates.

“I took out some of my pension and I want to change it into dollars,” said Galina, a retiree, who declined to give her surname. “None of us know what’s happening. We’re all worried that the currency will keep falling.”

The dramatic collapse in the rouble in recent days has not triggered outright panic, but it has prompted a rush to change currency and to stock up on durable goods such as furniture, cars and jewellery before they become even more expensive.

As I have posted many times before, the average joe or in this case the average Ivan, doesn't give a shit about gold and silver.  They all flocked to cash and durable goods, during a "crisis".

Yeah, as usual I will get a bunch of downvotes from the metalbugs, but seriously, what will it take for you guys to get it that shiny trinkets aren't that important in a crisis?  Even if you are a big bear, gold and silver are still a joke.

Look at what sheeple flock to in times of perceived crises, and hedge accordingly!

 

 

BigJim's picture

That's right, because the bid/ask spreads on furniture, cars and jewellery make the perfect currency hedge.

Is it any surprise that the average Russian - after generations of being brainwashed with Western notions like communism - should be clueless?

And yet here you are, at Zerohedge, and you're as dumb as they are.

Miffed Microbiologist's picture

At some point I think that furniture will be be broken up and used for firewood. Crash Course Capitalism.

Miffed

quasimodo's picture

It would appear that there is one troll that may disagree with you. Keep in mind, they get paid with fiat and free porn access 24/7

Paveway IV's picture

That picture in the London Evening Standard is amazing. 

I didn't even know you could buy an Indian guy in a green sportcoat. What do they go for nowdays?

smlbizman's picture

that was funny....

and i think they go for about tree-fiddy...

Puncher75's picture

Now THAT is funny! By the way, are you a GBU-24 dropper?

Paveway IV's picture

We preferred to think of it as express delivery back in the day.

Zero Point's picture

Nah, Ikea furniture is much more durable than gold and silver.

Russians are geniuses.

The9thDoctor's picture

Ikea furniture is much more durable than gold and silver.

The narrator (played by Edward Norton) in Fight Club totally agrees and endorses that statement. 

scrappy's picture

Just do not forget what happened to Edward Norton when he crossed the ruskies in the Italian job.

Antifaschistische's picture

Yah, some FEDtard needs to give the Russians a lecture on how Gold isn't money......however, you should have bought a LOT of it.

This is what perplexes me.  This situation plays out around the world over and over.

Some wise sage may even say "you should keep 10% of your assets in PMs"  Which is fine. But when the SHTF like the last week in Russia, like what will eventually happen in Japan.   You want 100% of your assets in somthing that has widespread international value.  oil is my favorite and if I could store a thousand barrels of unleaded and diesel in my backyard I would....because I know I'll use....but I can't.   So, now there's millions of russians who wish they had been stackers.

nope-1004's picture

Totally agree.  In today's "market", ruled by fraud and corruption, putting 10 or 20% of your wealth into real assets is too little.  And as we see now, it's too late to start stacking today in Russia.

aurum4040's picture

In short, Russia(ns) has seen far worse during periods of far worse account  balance ratios ~ it's overhyped, the market is very short sighted to say the least, and Putin's Russia will be fine. Crisis is opportunity.

noben's picture

"Russian people need to purchase bulli's. Physical delivery, of course."

They act no worse than the CBR. Neither is using Gold as a hedge.

If Russia doesn't have the brains & balls to back the RUB with 20% gold+platinum, then they're not as clever at chess, poker or economics as many peeps here give them credit for. Even if it takes a bit more time to have their RIFT up and running, they can and should still calm the BRIC/EM markets by making the ANNOUNCEMENT.

Either that, or other Big Players (Beijing! or Redhshields?) are co-stirring the Russian pot.

Boondocker's picture

No laziness. ...everyone else is just doing what they do.

Ghordius's picture

you do realize that Russians have a living memory of currency collapses, among other things, and a longer memory of far worse. they never tended to the hysterical, anyway

TruthInSunshine's picture

Krugman is on phone with Japanese PM Abe & BOJ's Kuroda, telling them to start making tactical moves to annex SE Asian nations to REALLY devalue yen and boost consumption via "pull forward" panic.

Charles Wilson's picture

When will the Drubocrats go after - *Gasp!* - the HOARDERS?

Ghordius's picture

poor Galina the retiree that wants to exchange her Rubles to Dollars would normally be among the worst hit, together with her age cohort. there might be lots of blameless victims of this, for Russian history, minor disaster

nevertheless, the Russian People was never as happy or prosperous or confident as in the last years... since practically ever. strange, but true

and Galina the retiree is among the conservative supporters of Putin, and I'm confident state pensions will not be in any way cut, which with a more food-autarkic Russia, with plenty of domestic energy...

so all in all, don't expect riots in front of the Cremlin. perhaps some demonstration in front of the CBR, Russia's Central Bank

noben's picture

You miss the forest for the trees, Ghordius.

A currency collapse collapses ALL STRATEGIC INTERNATIONAL developments for Russia -- which includes (but is not limited to): Oil+Gas pipelines, Arms, BRICS+EM Trade.

Rather than Russia being in the lead, in charge, they will be totally on Defense, while the US (Fed, CIA, DOD, NSA, Wall St) are on a global rampage of getting real assets and collecting on Debts.

It's the grand global game of RISK being played out, and although I'm rooting for them and wish the Underdog well against the Global Bully, Russia MUST up its game in a MAJOR way, or be left in the dust. They NEED to kick Obama and Wall St right where it hurts, and they have yet to do this.

The clock is ticking but the scoreboard is not in Russia's favor. IMO.

A Nanny Moose's picture

Patience. The whole world will burn soon enough. These are the economic conditions that allow madmen to rise power....just wait for the empty store shelves, and the people to start burning their paper fiatscos to keep warm.

bwh1214's picture

This is the increase in money velocity that causes hyperinflation.  Money velocity not money supply is the difference between deflation inflation and hyperinflation.  

It’s an economic hot potato and it needs the right conditions, we will have those conditions soon enough.  Japan is the next major to experience it though. 

knukles's picture

Y'all got it!  Here's a prime, pure and unadulterated example of a behavioral shift in the public's liquidity and spending preferences that boosts V and this GDP and or P.  And you can betechur ass it's gonna do both in this case.  Stores get cleaned out, orders back filled, people bidding for shit on shelves.  Ba Boom!  Instant GDP boost

bwh1214's picture

Yet no production to refill the stores, and there in lies the economic destruction caused by hyperinflation.  

How are Americans so narrow minded to not pay attention to this case study.  I prefer Japan though, lets watch that debacle. 

decon's picture

Inflation is a monetary process, hyperinflation is a psychological event.

bwh1214's picture

Agreed and the prior is gradual where the latter can, obviously, happen overnight. 

rocketroj's picture

Just watch the RHI (Russian Hoooker Index).  Back on the 8th it already cost twice as much to get some.  If you need a leading indicator look no further.

Bangin7GramRocks's picture

Kudlow just came all over his green shoots!

Jumbotron's picture

Fuck the stupid ass Russians.  Always bowing down to the strong man.

 

Enjoy your 50,000 ruble bread.  Vodka will still be cheap though.

 

 

 

where_is the_nuke's picture

Why so serious moshe? Shake your ass and sing hallelujah.......... hallelujah

 

bid the soldiers shoot's picture

JMBTRN

Vodka will still be cheap though.

Not as cheap as your pathetic comments.

TruthInSunshine's picture

Jumbotron hails from a long line of ZIOKIKES.

Jumbotron's picture

Nope....just an anarchist who doesn't give two shits and a holler about America or Russia.  Or neo-cons or neo-libs.  Or Russian strong men ruding ponies showing off bitch tits or black faggot presidents.

 

Or Ras-putin cock sucking Zerotards