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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NotApplicable's picture

Why do you treat abstractions as real people in order to ponder their "suicide?" This is much more like a homicide of the actual people living in Japan, and the perpetrator of the crime is named Rockefeller.

Oh, and there's no such thing as proving a negative.

Debugas's picture

you telling me russians do not have their credit cards maxed out yet ? WTF ?

Chad_the_short_seller's picture
Chad_the_short_seller (not verified) Dec 16, 2014 1:51 PM

You can thank the good ol us gov't for creating this mess

alexcojones's picture

US dollar is healthiest horse in the glue factory.

And acting like a deranged colt before the inevitable blow to its head

AG and AU blow to the head that is

NoWayJose's picture

Proof Of Concept for Abenomics -- showing that the Bank of Japan still has NOT DONE ENOUGH!  <wink, wink>  And that the BofJ has to really crater the Yen in order to achieve GDP and wage growth!

db51's picture

Buy furniture. Cars and Apartments?  W T F.  This is insanity on steroids.  Fucking furniture, electronics, cars, and apartment would be the last thing on my shopping list if I were in their situation.   Can someone explain this to me...and how in the name of God this is something to cheer about as folks line up at a fucking IKEA.  Jesus, please come quickly....We've now gone total fucking retard.

 

How is it possible to "save their rubles" by turning it into a worthless POS IKEA furniture and an Ipod.   I'm ready to put a 9mm in my ear, cause the entire human fucking race has gone over the edge.   Insane.

Jayda1850's picture

It is times like these that I can totally understand how greats like Hemingway and Hunter S. Thompson could take a shotgun blast to the head. I believe the world drives them to it more than their own demons do.

Maxter's picture

While I mostly agree with you, buying furniture is actualy a good idea.  I noticed that most people change their furniture not because it is broken, but because of esthetic reasons.

If you don't care about that then buying something that will last you 20 year might be a good idea.

Ghordius's picture

I hear IKEA is not the same, or has the same quality everywhere. it would not be the only brand to do so

813kml's picture

I can think of no better way to ride out a hyperinflation than a new bed, many cases of vodka, and a lithe Russian devotchka.

scrappy's picture

Don't do it Db51, we will need you "crazy types" in the game. It is insane.

ufos8mycow's picture

I just spent the last three days collecting a bunch of rocks. I will be offering them at an exchange of 90 rubles per rock.

Max Steel's picture

put a rock on your brain then 

Bell&#039;s 2 hearted's picture

motherf!%ckers

 

i bet Eugenia's inbox full

kevinearick's picture

The critters have been trying to build a one-way road to city, and failing, for thousands of years, but they don’t care, because they are consumed by what happened yesterday. Economics is not a closed-system, zero-sum game, which is what the economic priests have always tried to prove, in their own self interest. The Euro was an oxymoron, problemsolution from the get-go, and Silicon Valley is just the latest in a very long line of Edisons, with the intent of increasing the efficiency of extortion as its foundation.

The State has been holding me up for $10k for 20 years, losing millions in taxes, on the assumption that labor is replaceable, printing inflation to get its tax base. The critters choose to believe that they are replaceable and therefore everyone else is. If you don’t show up to work, the economy not only loses your productivity, but, more importantly, your multiplier effect on others, which, as you can see, Big G is desperately trying to ignite, and failing.

I prefer to work union, but when I don’t I charge two to three times the union rate, and I short the short, eliminating future make-work. That is what the Fed is fighting, and it’s going to lose, like it always does, in the long run. It didn’t abandon the gold standard by choice. China is welcome to hoard gold, along with all the other critters chasing shiny objects, squatting on farmland, starving their own people.

Putin doesn’t care what the price of oil is; he wins either way. Labor doesn’t get up in the morning because the Fed prints paper, and the corporations are not buying back stock and increasing dividends, with middle class purchasing power, by accident. How many critters do you suppose found themselves on the wrong side of the oil bet, most not even knowing that they made the bet?

The world is always getting smaller, for those who choose to live in a bubble. If you bet, the empire always wins, surprise, so bet on yourself. The union elevator mechanics have a job because many, many more union elevator operators went on strike, and ta-da, where replaced, magic. Fewer people making relatively more paper is a problemsolution.

What they say about assumptions is true. If you want to get on a Boeing piloted by computers and kids with a joy stick who think that life is a game, you are welcome to do so. Germany is going to lose, again, and do something stupid, again. Don’t get involved in other people’s feudal marriages expecting a happy outcome. Containment is a stupid game, McNamara was a moron, and so are the captains of the US Navy, who bet on pensions like the rest of the herd.

Answer the questions, get out of the way, and pay the bill, because I have much better things to do than fix poor German technology so Italian bankers have a reason to exist. Italy doesn’t have all those elevators by accident.

Who puts money in the bank to give Trump the arbitrage he needs to exist, in a long line of masters and slaves, controlled by assumptions in a computer? How many times a day do you suppose Trump gets into an elevator?

You might want to learn something about unions, before you start talking about labor. Eat all the paper, break all the windows, and dig all the ditches you like. The global cities are sitting on centuries old infrastructure, which is a sunk cost, financed as economic activity, critters chasing their own tail, wondering why they are getting poorer.

wendigo's picture
wendigo (not verified) kevinearick Dec 16, 2014 2:50 PM

How much acid is normal for you?

kchrisc's picture

If I hadn't woke up to Zionism in the past year or so, I wouldn't understand why and what is happening now in Syria, the Ukraine and Russia, and with oil and the dollar.

The Zionist western banksters will make sure Greater Israel gets their Lebensraum in Syria, no matter how many Goy have to freeze or die.

An American, not US subject.

 

It is not a conspiracy, just organized plunder and murder.

813kml's picture

 If I hadn't woke up to Zionism in the past year or so

Waking up in bed to a severed horse head really drives their agenda home.

kchrisc's picture

Though, waking up to head is rather nice.

An American, not US subject.

FieldingMellish's picture

Why aren't they buying stawks then?

knukles's picture

With a name like Liesman, it's got to be good.
I don't get it either.

D-liverSil-ver's picture
  •  S Rozhdestvom Khristovym
Quinvarius's picture

They should buy stuff that will last through a war, not furniture.  The Rouble's problem is not oil as much as it is the West's obvious intent to provoke WW3.

Frank N. Beans's picture

...because everyone loves those Russian-made automobiles.  (sarc)

vincenze's picture

Let me check.

The Lada Niva costs 350,000 roubles or $4,500. Now show me an SUV that you can buy for $4,500. The Wrangler starts at $25,000 or 6 times more.

RaceToTheBottom's picture

Actually using 1944 as a guide, buying Gold Russian watches and cigarettes, and alcohol.  The watches are swiss designs and are known as good, plus the gold is on your person at all times.  Don't forget the gold bands...  Not sure the nylons works in todays world, but hey?

My dad did that just ahead of the Germans and ther buddies...  

where_is the_nuke's picture

Hookers and coke. Hookers and coke. Hookers and coke and vodka.

Panic Mode's picture

Meet the Russian Black Friday. Merry Xmas ho ho ho

vincent's picture

It's all over now...

APPL halts online sales in Russia

tecno242's picture

Heading straight down the hyperinflationary bullet points...

Next will be stores raising prices on a daily basis because of demand.  Then the government will try to implement price controls.  Those controls will fail, especially for food, as prices rise daily, they will ignore the government to save their own ass.

Then the mad rush.  That is how money turns to toilet paper in 6 months.

yogibear's picture

Japan is headed that way.

Eventually the US.

 

Jack Burton's picture

Interesting.  It seems logical to conclude now that the collapse of oil prices, and producers are maintaining production, is part of the economic war on Russia. It now, given market behavior , seems also that speculation driving the Ruble into the dirt is also part of this economic war. The real economy and real state finances of Russia are quite sound, debt is under control, reserves are very high. In fact, the USA would envy the financial state of Russia, which does not live on debt, but on production. Todays FX action is illogical, it simply IS. So behind the curtain, of so called FX traders, lurks the giant in the room, The USA and it's Fiat Dollar System. I know that real currency traders did not beat the ruble down today after it's early climb, don't tell me this was normal market action, it was not, and everyone not a liar knows it was not. With these interest rates, with the size of Russian FX reserves, Gold, and good trade balance, there is no way the normal FX trader is throwing everything he has into ruble speculation. Come on, seriously expect me to believe that.

I was not sure, until todays action in ruble trade, that this was economic war carried on by the USA and it's infinite dollar supply. But it is clear after what happened today that the US has it's unlimited dollars out there working to drive the ruble into the dust. Until a couple days ago, I was not sure the oil price collapse was anything but a bubble bursting, and a drop to market rates. When it dropped again after OPEC met and decided to let oil fall and to all maintain production no matter the price, that rang some alarm bells. This was an epic switch in behavior. What happened inside the OPEC meetings was nothing short of a Saudi Coup, in which they basically took power over OPEC with it's client at it's back.

The USA made the choice to push it's clients to wage economic war on Russia, and to sacrifice Frackers and Tar Miners to do it. SOme will say "wait, that bullshit, the USA would never let the fracking miracle collapse. But what if fracking isn't a miracle after all, what if it's debt fueled drilling and fast depletion of good patchs made it vulnerable already. In that case, the pain is worth the gain.

Since this has all happened at warp speed. I suggest a market long term trend to lower oil prices was pushed off a cliff by the USA and Saudi and allies. The attack on the ruble, which should fall a bit on lower oil, is a route now and the USA has infinite FX power to drive it lower via it's many agents.

Putin was caught sleeping, trying to please the EU and to please Oligharchs and Liberals inside the Russia economic and financial system. He is getting fucked now, he is getting fucked "long time". The Russian Central Bank is more his enemy than his friend, they are part of the Neoliberal economic system and would just as soon surrender to the west and become one more American cotnrolled agent for the west.

Unless I see real evidence otherwise, I think oil and the ruble are down to 30% real market forces, and 70% US economic warfare taking place via the financial and market systems under domination of Washignton. At the very best it would be 50% - 50%, but I doubt it is that even.

Now it is up to Russia's population to decide which way they will jump. Believe it or not, the general mood of the people is important, if they turn on Putin he would be gone very quickly. And surrender would be total, if the people consider this to be war, then I predict they push Putin to fight back. Then it could get ugly!  This is hard to know, even the Russians don't know which way they are going to go. So this is 50% -50%, Anti Putin coup could happen with pro USA liberals winning, [this is where the central bank stands by the way], or tradition could rear it's head and Putin would get the support from the people to go on a war economy foooting and fight back against king dollar. To do so would require at the least the aid of China, whi is getting pretty fed up with Obama's Pivot to Asia. SOme other BIRCKS might come onboard as well.

In any case, what you see today is the power that "King Dollar" gives the USA.

tecno242's picture

While I don't disagree that the source of the oil price slide could indeed have been started as economic warfare...

the rouble is falling off a cliff because the oil price slide is likely to crush the  Russian economy.  While their domestic debt to GDP ratio is not currently bad, what's being priced in is that their GDP is going to fall drastically in a very very very bad recession/depression.  This would cause the GDP / debt ratio to go out of whack and very potentially default on domestic debt.

In the end though... what really matters is whether Russians really start believing the money will almost certainly be worth less or nothing in the future.  If that becomes the mindset en masse... it doesn't matter what Russia's financial state is... it's game over.

youngman's picture

If your a rich Russian you take your money out of Russia as fast as you can..that has been going on for years....they just dont trust themselves....so they have already traded out of the Ruble.....its the poor pensioner who lives on $15 a month..they will just starve more and freeze more...and there is many of them...

Miss Expectations's picture

Russian population not jumping population like how high hands up American media stupid sheeps.  Russian population remember bolshevik cold blood killings Romanov family. Putin chance at 80% or moar.

(edit...still deserve arrow up)

RaceToTheBottom's picture

"I was not sure, until todays action in ruble trade, that this was economic war carried on by the USA and it's infinite dollar supply. But it is clear after what happened today that the US has it's unlimited dollars out there working to drive the ruble into the dust"

 

Russia has been elected the Lehman of the world.  Syria and Crimea was just the visible tipping point.

As with Lehman, the voters had only altruistic motives in mind.

 

 

yogibear's picture

Yellen, Dudley and Evans are all taking notice.

See, you too can trigger spending by having a currency crisis, money printers.

D-liverSil-ver's picture

Queen takes Bishop, check.

Russia's move.... They're pretty good at Chess

Son of Captain Nemo's picture
"Russia Prepares For GDP Surge As Consumers Scramble To Spend Their Plunging Rubles"...

Isn't it ironic that just 13 years ago after what we were told was an attack from 19 hijackers with "box cutters" that started our plunge into the economic abyss we saw George W. Bush on just about every television channel that even though we were at war after the worst attack on America in 60 years we shouldn't worry too much about our new police state, urging us on to enjoy the "Great Outdoors" and to spend our money as the true sign of patriotism!!!

I thought to myself if we're going to be going to war why the fuck would anyone be thinking about a vacation?  In the Fall of 2001 I was thinking "victory garden" and the President of the United States was telling me to "party"???!!!!

Juxtaposed to the lies that got the U.S. to loot, decimate torture and murder all the Countries we've been through in the last decade the Russians are doing just the opposite of what Americans would do.  They are spending in order to save because they know and understand what they are facing!


NotApplicable's picture

My first thought was "Better go get some of that cheap gold."

Son of Captain Nemo's picture

My first thought was "Better go get some of that cheap gold."

Let's just say I wish I had had your wisdom all those years ago. 

Max Steel's picture

Everyone talks about the rouble, Ukraine's hryvnia gets to continue its plunge in private -25 to GBP (12 pre-Maidan) -http://www.xe.com/currencyconverter/convert/…

tarabel's picture

 

 

I was thinking about that this morning as well, and then I saw this WP story that somewhat surprised me. Interesting chart of oil, rubble, and hyrvnia all together.

 

http://www.washingtonpost.com/blogs/wonkblog/wp/2014/12/15/russias-economy-is-doomed-its-that-simple/

zipit's picture

Russian Bitcoin users unaffected.

Sick's picture

Take a step back.  Maybe this is a set up where the USA causes major problems for Russia and the Ruble which makes Russia very mad and giving them a motive to attack on USA.  False Flag Coming?

Son of Captain Nemo's picture

Maybe this is a set up where the USA causes major problems for Russia and the Ruble which makes Russia very mad and giving them a motive to attack on USA.  False Flag Coming?

Let's see now...  False Flags -Little Ones

Shoe bomber Check

Sears Tower Bombers Check

underwear bomber Check

Ft. Hood shootings Check

Wisconsin Sikh temple shootings Check

Aurora Check

Sandy Hook Check

Boston Marathon Check

MH-370 Check

MH-17 Check

James Foley, Steven Sottloff beheadings Check

Ebola outbreak Check

Sydney chocolate house hostage crisis Check

Racial discrimination protesting and riots as a means to distract divide from tightening NDAA martial law Check

False Flag(s) una grande scale?...

9/11 Check

7/7 Check

Mumbai bombings Check

Fukushima Check

Syria chemicak weapons attack by FSA blamed on Assad Check

Yeah I'd say that the probability is strong for another false flag given the short list of the ones that we know about since 9/11!

rejected's picture

It appers ZH has Russia defeated. Remember, until the fat lady sings, the game is still on.

Just sayin...

Ghordius's picture

I guess that while many here stack, or perhaps because they do, they picture a currency collapse as an "Armageddon Scenario". so they have difficulties picturing Russians taking this "in a stride"

Sizzurp's picture

Economic warfare and sanctions leads to hyperinflation.  Looks like the same thing Iran went through.  Maybe the chess master is a few moves behind.