This page has been archived and commenting is disabled.
More To Ruble's Collapse Than Meets The Eye?
Submitted by Colin Chilcoat via OilPrice.com,
The ruble is dying, and fast. In what is now being dubbed ‘Black Monday’ the ruble’s value to the dollar dropped nearly 15 percent. Tuesday brought no respite and the ruble fell another 10 percent. The ruble’s collapse follows a similar – though by no means as extreme – slump in oil prices. Still, the Russian economy’s troubles are deeper than that and President Vladimir Putin will be hard-pressed to find an easy out. With a recession looming, state energy companies are struggling to stay afloat, if not directly contributing to the country’s woes.
On the year, the ruble has lost more than 55 percent of its value against the dollar, breaking psychological barrier after psychological barrier. Tuesday’s low of 80 marks a new record and harkens back to the period of hyperinflation that characterized post-Soviet Russia. Then, as now, citizens are seeing their material wealth disintegrate amid rising costs domestically.
Source: QZ
For its part, the Russian central bank has been unable to stop the slide. Neither periodic use of the dwindling foreign exchanges reserves nor interest rate hikes have proved effective. The latest interest rate increase – enacted under the cover of night Monday – brought the key rate to 17 percent, up from 10.5, in an effort to end investor speculation. Tuesday’s trading demonstrated the speculation is far from over and the central bank is far from in control. The higher rates will further squeeze growth as the economy heads for a 4.5 percent retraction next year. Ill prepared to wait it out, the central bank is clearly a step behind the game and perhaps even out of its league. Black Monday suggested other powers might be at play.
Monday was incidentally the day of an interesting 700 billion ruble liquidity auction. Prior to the auction, Rosneft raised 625 billion rubles (almost $11 billion) in a bond issue backed by the central bank. The central bank then quickly cleared the lower-yield bonds to serve as collateral for banks seeking liquidity in the auction. It’s unclear who purchased the bonds, but Rosneft explicitly stated the proceeds will finance internal projects and will not touch the foreign exchange markets. Nevertheless, speculation has persisted and theories abound.
It is within reason that Rosneft’s subsidiaries and their respective banks were prepared – or financed by Rosneft that is – for the bond issue, after which they could refinance the bonds at the central bank for a 5 to 10 percent profit. A similar theory has been suggested for the bigger state banks like VTB and Sberbank, who would not comment on their involvement. The idea goes that they purchased the bonds, flipped them for foreign currency at the central bank, and then passed cash along to Rosneft through a currency swap. While complicit, the central bank has little control and, in either scenario, the money hitting the market from such a deal is certainly of the scale to inflict the damage we saw Monday.
The move highlights dire straits for Rosneft who must answer to $10.2 billion of debt in the fourth quarter, which includes a $6.88 billion loan from foreign banks due Dec. 21. The company – whose market value has tumbled 40 percent this year – has approximately $55 billion in net debt and has thus far been unsuccessful in its attempts to garner bailout money from the government. In its recently defined strategic development goals, the company stressed efficiency, gas production growth, and the localization of advanced technologies and equipment. In the meantime, all eyes at Rosneft are on the price of oil, which appears to be undercutting their expectations.
For Russia, the uncertainty is just as great. The Russian stock market has collapsed in tandem with the ruble and traders in the US anticipate stricter government controls as early as this week. While flows of money have thus far been unimpeded, capital controls such as limits on foreign exchange transactions appear ever more likely as the ruble continues to sink.
»
- 40905 reads
- Printer-friendly version
- Send to friend
- advertisements -
You're missing the point. This is economic warfare.
casus belli (kay-s<ls bel-I). [Latin] An act or circumstance that provokes or justifies war. (Black's Law Dictionary)
https://www.congress.gov/113/bills/hr5859/BILLS-113hr5859enr.pdf
As a result today's enactment of the Ukraine Freedom Support Act of 2014 and under international law, the Russian Federation is now entitled to retaliate against the United States of America using all conceivable means at their disposition, whenever they deem appropriate (UN Charter, Chapter VII, Article 51).
War is officially on.
Sweet, lets go to the breakers and dance.
Russian firms are learning the hard way that the western banksters can never be trusted. Notice however that the real assets did not disappear, and that the Ruble is substantially undervalued versus other currencies. Don't be surprised if a huge influx of USD dollars suddenly appear in Russia, buying out assets on the cheap. This is just another way that banksters screw us.
There's one good bank, but you got to go to vegas.
Russia should pass a law stating that all asset purchases by foreigners will be transacted in gold
All they have to do is let westerners buy up everthing and then nationalize what was bought, then redistribute it to cronies. That way, they get lots of dollars and euros and keep all the stuff. Western interests can buy all the land and buildings and factories and such they want, but they cannot haul it back to Europe or the USA. Art, diamonds, jewels, etc, are another matter, but the real money is in land and what's on it, and that is not easy to haul over a border.
THIS!!! MOTHERFUCKING THIIIIIIIIIIIS !!!
They should have gone full N Korea on them
Russian firms have no choice. The Russian National Bank - Russia's central bank - was designed by the West to keep Russia in a perpetual third-world economic state. It is basically a Western banker parasite attached to Russia's carotid artery. They can't just rip it off or they will die as well. The Russian government doesn't control the central bank - it's a foreign-owned private entity. Part of the rape of the Russian people in the post-Soviet asset grab.
Putin is maneuvering to remove it, and every bank in the West is lining up to prevent that from happening. They seek to foment a popular uprising in Russia to remove Putin before Putin can replace their current foreign-controlled central bank with a real Russian one. The most powerful Jewish-Russian oligarchs today are bankers and will do anything to eliminate Putin's threat to their criminal livelihood.
https://www.youtube.com/watch?v=VT085isnyB0
This only ends one of two ways: Putin kicks out the foreign central bankers and throws the current Jewish oligarch Russian bankers in prison for years of treason and theft, or the bankers have Putin killed first.
great interview, thanks for posting
At least in Russia they are having serious debates over ejecting the CB. In the USSA, this isn't even whispered. We are so fucked.
If the central bank in the US was owned by Russia or China, then we would certainly be having the debate.
Considering who actually owns the central bank in the US, it's not the least bit surprising that there was no debate, is no debate and will never be any debate.
JFK was going to dial the Fed out of the picture, making those nice "treasury notes". That was one of the things that likely led to his assassination...
True, but according this:
https://translate.google.sk/translate?hl=sk&sl=ru&tl=en&u=http%3A%2F%2Fp...
Russian began emit Ruble independently or rather according their economic needs. The fun has just started.
1) Russians have already lost about half of their life savings, seen their paychecks cut by 50% in real rather than nominal terms, watched inflation go up to 10% even prior to this latest crisis, and you want to natter on about how fucked the United States of America is? We might end up fucked in the future, but these guys are fucked right now. Period.
2) And it is only going to get worse for them. Many admirers of Grandmother Putin around here have been posting the same set of financial data. Debt-to-GDP, foreign reserves, etc., but they avoid speaking of the only number that truly matters and that is what used to be known in Silicon Valley as the BURN RATE.
The current burn rate where the 50% of government revenues provided by oil is now cut, say, in half, which leaves them with a 25% shortfall. That shortfall is only going to increase as the price of oil falls further and more countries get LP shipping terminals opened. Plus, a 17% interest rate kills business. That means more of a drain on whatever Russia uses for a social net, less tax revenue, and further increases the burn rate. Kind of what we had going in 2008, but we can borrow money and they can't.
So where is the money coming from to cover that shortfall? 25 billion from the Chinese currency swap agreement? Big deal. That won't even begin to offset the giant sucking sound of money fleeing Russia to the west.
No, there are only two sources of the cash necessary to maintain the Russian State--its fx reserves and its gold. All of those billions piled up in good times are about to head west, as the British used to say. Can Russia outlast the storm? Depends on how much their burn rate is, how much it increases, and how long it needs to burn. The final outcome is going to be a Russia that has a lot less gold and hard currency when this is over. But at least you know why they aren't going to spend a lot of it defending the ruble.
Boy, are we Americans fucked.
you lost me at but we can borrow money and they can't.
you not borrow money, you print it out of thin air.
PERIOD. :)
I doubt more than 25% of US Serfs know what a "Central Bank" is.
At least in Russia they are having serious debates over ejecting the CB. In the USSA, this isn't even whispered. We are so fucked.
"Jewish oligarch"
Yep, them damn joos again. They control everything and outsmart everyone except Zerohedge and all the Zerohedgimites, cause we's on to them... which posits the question, if we are smarter than the joos, how come Zerohedge does nto rule the world and control everything? It must have something to do with the number 31.
Well, you see, we had this big book filled with all of our math skills and we let the Jewish guy across the street borrow it.
But he stole it and now we all have to work in places where the cash register dispenses change automatically since we can't do it ourselves without the book.
But Grandmother Putin has promised to get it back for us and that's why we like him so much--because we can quit the crappy jobs we have now and get new ones as nuclear engineers and bitcoin miners.
A large number in the ZH community have been short SPY from about 900. And hedged that with long GLD from 1700.
Responding to calls from the broker takes most of the day.
PIGS GET SLAUGHTERED. Going short is always risky.
Judaists? Judeochristians? Judeocatholics?
This is not outsmarting other people. This is being the richest kid on the block, and yet pretending to be a martyr, and begging other people to help, and then using that help against them. "He killed them with their love." ("The Green Mile" movie) This is selfish dishonesty. "Thou shalt not steal".
But apparently such culture, such "acting", has worked for a long time. The Romans began every invasion either with a pretense of having been abused or a pretense of helping protect a "friend" in the invaded country against his neighbors. Always and everywhere at a huge cost in slavery and misery to the pretenders' victims, in nation after nation after nation. And despite the march of science, that cost in slavery and misery grows larger every year.
And now things have changed. Now there are simply too many people on planet Earth, and "me first, because I am a victim" cultures are wiping out Mother Nature. So there WILL BE less of everything that is good on planet Earth - for EVERYONE's children. Yes, the selfish dishonest will be able to brag to their children about the castles, private jets, yachts, and professional sports teams they own, but on a planet with no elephants, tigers, or coral reefs. Their children will force them to admit, "I built me castles, and all was vanity, for I built them by taking a planet which was alive and beautiful, and killng it, and now I bequeath to you both the castles and the dead planet".
So it's time to grow up. Growing up means giving up selfishness, and stepping up to responsibility. "It is more difficult for a rich man to enter the Kingdom of Heaven than for a camel to fit through the eye of a needle". But it will be good, because "more blessed is he who gives than he who receives". Have faith.
Evgeny Fedorov(PLM). He has several interviews on Youtube. He basically says it's time for Russia to throw out the Fifth Column or fall to the Western parasites. He said the West has about 6 months to engineer unrest, for toppling Putin, by using cheap oil. He expects an Orange Revolution-type attempt in 3-4 months.
Thank you for the link. Awesome interview. Informed Russians are just as pissed as we are. The bad thing is, they are probably pissed at us. Does Putin have the cajones? More like do his backers have the canines. I'm no geopolitical or finance genius by any means but my mind keeps coming back to Joel Skousen's theory. Somehow it just keeps making sense with everything that is happening. So will Putin be the monkey wrench or is he just another player in the drama. Either way good to see a politician talking passionately about a country that he cares for. Again thanks for the link.
Awesome, awesome interview. I'm forwarding that to all my close friends/family.
If that's the case, then either way unfortunately leads to the inevitable...
we're fucked.
Andrew Jackson did it. Putin can do it.
Don't forget that German firms and the like are going to be hard hit as well,which means a double whammy for foreign bankers fostering a crisis to buy distressed assets.
I can't think of a single financial crisis where the banks didn't come out stronger and with more assets than before the crisis.
Right on! Seems to me this is a play to gain absolute control on the worlds oil supply either through war or economic destruction.
Chill, this is just the West reminding Russia who runs Bartertown. Here are the cold hard facts:
NATO GDP: $31.32 trillion / Russian GDP: $2.01 trillion
NATO Population: 900 million / Russian Population: 146 million
NATO Defense Spending: $1.023 trillion / Russia: $0.096 trillion
NATO Personnel Under Arms: 3,370,000 / Russia:845,000
Vlad has forgotten his place in the world, and this is just a reminder.
No, it's a hostile takeover to grab his resources. His place may be six feet under.
You can't grab his resources without physical control of the land. If you bought all the oil in Russia, they could just nationalize their oil and take it away from you. Happens in lots of place lots of times. The only way to "grab" the resources is to physically contro the land it sits on or under.
What was NATO's sovereign debt, just to make your comment a little more balanced?
Lloyd: "I run Bartertown for The Boss."
O: "Who is the Boss, anyways?"
Lloyd: "Satan. Didn't you watch 'Devil's Advocate?'"
O: "No, I was campaigning."
Lloyd: "It's true. Ask Jaimie."
O: "You mean all that Jay-Z stuff with pyramids an' shit is for reals?"
This Sir Brave Robin guy has a consistency that is admirable somehow. His adhesion to fantasy is dedication of the highest order.
This mentality is ingrained in the 'american' world so much that they can not think of a game without thinking of themselves as winners. They prefer the flattering images sold to them by propagandists like Hollywood. This leads to serious distortions in their analysis.
Should be a good one...
Accounting trickery when reminded that NATO lacks a GDP. Still, a valid conclusion can be drawn when one considers the looting potential available for NATO to absorb from constituent member states.
Intended relevance of this statement evades observation. Perhaps meaningful if intent is to send entire population on invasion to Moscow armed with sticks and rocks. Not an advised method for the next European war, but keep it in mind as it will be needed in the European war which follows it.
This cold hard fact is best an indicator of the degree of parasitic infestation of economy imposed by military procurement. But hey, NATO member states have little debt and are experiencing double digit economic growth, so why not?
Neglects to mention that, structurally, only about one third of these are actually "attached to the alliance". Of these, about 15 percent are deployable within 7 days and 25 percent are deployable in 90-120 days. The rest would require as long as a year to deploy (reference below).
Much of NATO armor is in storage, especially in eastern Europe. These are not readily available for combat. It took four months for Ukraine to deploy most of theirs. Reduced expenditures for their maintenance in storage resulted in only 25 percent operability.
You know, the comments this guy tells can be interesting to know. For comedy value, because for knowledge value, the answer is already known.
http://russia-insider.com/en/2014/12/16/1936
NATO resolve: 1.
Russian resolve: 9.
You realise you can also invest in Russia, thereby supporting market valuations.
Ruble vs dollar? More like Ruble vs TBTF western banks manipulating FX swaps. Dollar vs anything but itself in this environmnet is going to shine, because the corrupt FED pulling the strings is controlling the demolition. It's called "foreign policy".
Surely someone knows beyond a shadow of a doubt the RCB did not buy cheap dollars along with cheap gold back in the summer, right?
trade war
currency war
hot war
.
Free country
Fascist country
Radioactive country
All the more need for the constitutional convention, truth in design, truth in advertizing, truth in politics, blink and you could miss it.
You know, a big part of me wishes you were right and thinks we should try it. That said, the conventeers will be bought and paid for before they arrive in sufficient numbers to provide a new constitution modeled after North Korea or something.
No thanks. The founders got it right. Fight the real fight first. Then write the rules.
The only 'constititional convention' allowed by the constitution (article 5) does not have any power to change a single law. The states send representatives and they propose amendments that then go through the normal amendment approval process. 3/4 of state legislatures have to approve any amendments proposed by the convention. So there's a check against insanity.
You're right that the founders got it right. The point is that about 30% of the country hates the constitution and has completely derailed it. Think about it: a logical amendment would be one that clarifies that the 2nd amendment is an individual right. We're one supreme court appointment away from losing that right (de jure). That's how far we have come.
Even if the process has zero chance of passing a single amendment, it HAS to be done just to give the states a louder voice, and to get these issues on the table. They're not even in the room now.
If you are one who thinks any peaceful solution is impossible, you may be right. But if this is given a real try and fails, many behind it will have nowhere to go but toward radicalism, particularly if the feds derail the process or ignore it. I personally believe that secession/breakup is inevitable, and whatever we can do to legitimize it should be done, and that includes exhausting real alternatives. This is one specifically provided for us by the founders, and provided for just this sitation, where the people have lost control of their country.
It will be a sad day if Americans have to declare a "force majeure" and activate the Second.
can't we do it the old fashioned way?
Rocky Balboa vs Ivan Drago
Even if it was done the old fashioned way, we don't have an equivalent Japanese housing bubble and a following personal computer tech boom to follow it up with.
country #1: less than $700m in debt, around 15% debt/gdp, government budget on surplus, around 12% gold reserve/currency and vast natural resources
country #2: $18 trillion in debt, 106% debt/gdp, government budget on deficit, around 1% of gold reserve/currency and most natural resources peaked
ofc, it makes complete sense that country #1 currency should be in free fall in country #2 currency terms, the markets are free and not rigged at all...
Russian government budget is as much in surplus as a shale drilling operation was.
Cut oil revenues in half and they cannot pay the bills.
No one outside of Russia wanted rubles for investment even in the good times. Those with memories can recall Russian defaults. If you like Argentine bonds and currency then you will love Russian currency investments.
Exactly. The point people need to understand is that soon the US Dollar to Ruble value will be meaningless.
Soon the US dollar to anything but dog shit will be meaningless
I'll give Putin 3-6 months before he peggs the ruble to the Chinese Yuan.
Peg ruble to yuan serves no purpose as yuan is managed by Chinese to be pegged to USD.
Didn't a certain German Chancellor in the 1930s have a similar problem with Global Bankers?
As I recall, the problem was solved, in part, by anchoring its currency to real assets and real labor.
The CBR (CB of Russia) needs to do the same, or Putin needs to thoroughly clean his banking house, i.e. the "Central Bank of Redshield", that is looking like the Fifth Column with each week.
New rule. No more use of the Chess Player analogy.
Yes, and soaring on a one minute chart still does not count as a breakout unless you are a near sighted hummingbird.
And we don't like Mondays any more either. We want to shoot the whole day down.
https://www.youtube.com/watch?v=8yteMugRAc0
Fuck chess.
The allure behind the game of chess is peculiar. The game of chess is not a real representation of warfare as much as it is conceived to be. Unlike in the game of chess, there is never an instance where your opponent is frozen in time, incapable to act while you take your sweet time to decide and execute your next move.
It is delusional and stupid to consider chess to be a game of war.
Chess clocks are used in every tournament.
You have 2 hours to make 40 moves in tournament play.
Failure to make 40 moves within the time limit and you lose the game
http://en.wikipedia.org/wiki/Kobayashi_Maru
If that does not work...cheat! No sarc. Kinda like what is going on right now.
What the hell?
Chess is politics not war. Y'know... "pawns"...
The world today is more like the Chinese game "Go" than like Chess. Surround your opponent and starve him.
Nazis 101
Jawohl, mein Fuhrer.
Here's Johnny-comes-late and his theory... Boring.
I can predcit yesterday's temperature with stunning accuracy. My model goes to shit when I can not see into the future.
the story seems to end tuesday
russia saw huge ramp yesterday (stock market +17% iirc ... know ruble strengthened ... not sure how much, though)
Still buying...
krugman should advise putin to sell some oil calls
Ok that was pretty funny.
This shit show is going to get a foreign bullet exchange started. Nice knowing y'all.
Are you a banker? It's more fitting to JUMP, you get more minutes that way, up to 15 at least, depending on how big you are.
Maybe, maybe not. The US leadership really screwed the pooch back in the mid-90's by not being more inclusive with Russia. The Russians would have made excellent allies. I still wager that there are more Capitalists in Moscow than in Washington DC....
"And of all things on earth the Marxist hates the Kulak most"
from book: Count Your Dead They Are Alive! Wyndam Lewis 1937
Yes but US leadership is top-heavy with dual-passport holders whose people have a long-standing feud with Russia.
its not a colapse. they are not having balance of payment troubles
maybe i can finally afford Eugenia
I'm saving up for Natalia Poklonskaya.
BTW, do you know what "poklon" actually means? To bow to somebody. https://translate.google.com/#ru/en/%D0%BF%D0%BE%D0%BA%D0%BB%D0%BE%D0%BD
LOL, what are you? A Canadian shill for the LPC
and its "low loonie" strategy???
This reads like the Russians did it to themselves... on purpose!
We're busy pointing fingers at DC, but just maybe, the Russkies
are just as hot to heat things up, as DC is???
Moscow, it seems, WANTS an excuse to mobilize!
funny how you got downvoted but from Putin's behavior, thats exactly what I see too. He now has an excuse to pint a finger at the West and say: "It's ALL their fault!" (As he did today)
is this really WWIII or just a a Hollywood Movie ?
if it is a movie - dammit, even if it isn't - can we replace The Golfer with Denzel Washington?
Or at least a male
A male would give Putin something to look at.
A mule would give something for Putin ride, but then Reggie would lose his mount
+100
SD
Like I said in another post we're getting very close to the moment of truth. Wouldn't be seeing this if the powers that be weren't getting extremely uptight.
More to the Ruble's Collapse than Meets The Eye?
Colin you're genius!
Hey "Irish"
Time to celebrate your prediction about that Country's natural resources that everyone wants to topple up to and including a World War with a corn beef and cabbage after that "workout"!
If you're an Irish cyclist then I'm B.B. Netanyahu!
Err, I haven't the foggiest idea what you're talking about.
He's calling you a Jew, in a very poor manner.
Russia needs rubles. That’s her currency. That is the currency Russia needs for future trading – detached from the western monetary system.
When Russia deems that her currency has reached rock-bottom, she will buy back cheap rubles in the market with massive amounts of dollars. Russia may then flood the western market – with dollars, and by now we know what that does to a currency – and simultaneously buy back rubles from the West. A brilliant move to reestablish Russia’s currency in a new emerging monetary system – which Europe would be welcome to join, but willingly, no by Washington style arm-twisting.
Peter Koenig
http://en.interfax.com.ua/news/economic/240523.html
Belarus... We're talking China, India here.
see my post below.
:-) "hard currency like dollars or euros" HA HA :-)
this is it!
very disappointed at the author's complete lack of mention about how the Chinese may be extending a helping hand here.
deals would have been made, assuming that Putin is still clever and desires to remain in power (and prevent a coup d'etat from the oligarchs.)
perhaps it went down like this:
in exchange for financial support, Putin cedes to Jinpings's request for a stable and China-friendly Ukraine:
http://www.rferl.org/content/ukraine-china-leases-farmland/25114812.html
http://yaleglobal.yale.edu/content/chinese-agriculture-goes-global
basically, Putin has to deliver a peaceful conclusion to the instability and violence in Ukraine, whatever it takes.
The Chinese are fucking hungry (and for good reason)
The only problem is, Russia already wanted a stable Ukraine to begin with so nothing changes.
how much pride will Putin's Chinese friends force him to swallow?
http://blogs.wsj.com/moneybeat/2014/10/13/russia-moves-closer-to-china-w...
Russia finds itself up shit creek because their economy is dependent on the export of oil at >$100bbl and their policy toward Georgia and Ukraine has left them with no friends following a collapse in energy prices. Their brain dead closet homosexual leader has been too busy jailing his opponents when he should have been diversifying their economy.
Fuck them and their rusty nuclear weapons.
"The Pentagon will have to spend billions of dollars over the next five years to make emergency fixes to its nuclear weapons infrastructure, Defense Secretary Chuck Hagel will announce on Friday, after two separate Pentagon studies concluded that there are “systemic problems across the nuclear enterprise,” according to senior defense officials.
The reports are a searing indictment of how the Air Force’s and Navy’s aging nuclear weapons facilities, silos and submarine fleet have been allowed to decay since the end of the Cold War. A broad review was begun after academic cheating scandals and the dismissal of top officers for misbehavior, but it uncovered far more serious problems.
For example, while inspectors obsessed over whether every checklist and review of individual medical records was completed, they ignored huge problems, including aging blast doors over 60-year-old silos that would not seal shut and, in one case, the discovery that the crews that maintain the nation’s 450 intercontinental ballistic missiles had only a single wrench that could attach the nuclear warheads."
The USA finds itself up shit creek because their economy is dependent on the export of Miley Cyrus and their policy toward torturing foreigners, spying on everyone in the world, and "regime changing" any little countries that aren't already ruled by the international banksters has left them with no friends except Rush Limbaugh. Their brain dead leaders have been too busy collecting bribes from the international banksters when they should have been diversifying the economy.
"...has left them with no friends"...hmm, lets start with 2+ Billion in China and India !...off your meds?
Interesting.
So that could be a good reason why the 'Silk Road ' railway is being upgraded and why the Chinese want to build a deepwater port in Crimea.
what's the fastest way to transport food from Eastern Ukraine back to coastal provinces in China that was produced on land equivalent to the size of Maryland and Delaware?
I just finished reading this at the VineyardSaker blog:
http://vineyardsaker.blogspot.mx/2014/12/free-fall-of-ruble-brilliant-pl...
There position is basically that Russia/Putin has already made their move. Their position is that Russia/Putin will continue to allow the Zionist west to push down the ruble, and then use their vast dollar reserves to snap up cheap rubles while also dumping dollars on the market. A bit of win-win tit-for-tat.
"Russia not only has large dollar reserves, plus the ruble is backed by gold, a fact consistently omitted in the MSM. For now, Russia prefers to let the ruble plummet..."
"When Russia deems that her currency has reached rock-bottom, she will buy back cheap rubles in the market with massive amounts of dollars. Russia may then flood the western market – with dollars, and by now we know what that does to a currency – and simultaneously buy back rubles from the West. A brilliant move to reestablish Russia’s currency in a new emerging monetary system – which Europe would be welcome to join, but willingly, no by Washington style arm-twisting."
Just food for thought.
The banksters need to repay us.
Perfect. Your post just preceded mine by a few seconds, I think, so I didnt have the benefit of it, but your offering is exactly the kind of solution I was casting about for to make sense of it all. Occam's Razor remains in effect.
Yup, all working together, mostly, trying to put the pieces of the puzzle together and gain clarity.
The banksters need to repay us.
I am always amazed at the hostility some have to opposing ideas, and opinions. Opposing ideas, opinions, can only do two things, reinforce one's own opinion, or cast one search for truth and understanding in a new direction, while either way further enlightening that person. Both great things.
True story. Balance and integration are alien artifacts to the current age.
rubles are a joke....
Maybe you ought to get a bunch of them and stash them with your gold stash.....
The gold will have value in 10 years...
The rubles will be shit-paper.
Russia is an emerging/ pioneer market with nukes and a theif for a "president" or "man of the year"
A fuking lunitic backed into a corner can be a very dangerous thing.
It is cool to respect and admire the guy but he is a joke and will go down....
Hopefully not using nukes when his corner gets too small.......
There is absolutely no gold backing for rubles.
If you believe ruble is backe by gold, please tell me the government guaranteed quantity of gold for 1,000,000 rubles.
Given that this article was apparently written for Oilprice.com --not exactly a hotbed for insightful analysis-- and its foundation of purely speculative assertions, I think this guy is just 'talkin' the book' for his employers. And besides, isn't Rosneft actually a Russian government-owned company?
If so, I'd like to offer a bit of speculative analysis of my own: Given that the Russian gas and oil industries measure their costs in rubles, but their revenue streams in dollars, it may then be entirely possible that it was the Russian government itself has created this "crisis", which in reality may be no crisis at all... The Russians may also be aiming for secondary effects damaging to western interests, which would simply make all this a strategic chess move in the ongoing currency war --of which this is most assuredly symptomatic, regardless of the actual motives behind the scenes.
Why not at least cite the monthly capital outflows this year?
If you think this is tied to oil, you're about to be schooled
Russia's real economy does not warrent a rubel collapse of this magnitude. Russia's government fiscal postion is good, debt to GDP at 16%, Large gold reserves, 700 billion Dollars foreign curreny reserves, a population carrying little debt [most Russian own their homes and apartments outright], vas t natural wealth and a very under untilized agricultural potential. Russia has been feeding on EU imports that throttle domestic prodcution. A falling rubel is a cue for agricultura and manufacturing to rush into the vast hole caused by sanctions and rubel collapse. There is no depression or vat unemployment across the country. Yet, here we are, in a matter of days, literally DAYS, the entire monetary system is bordering on collapse.
To compare, Great Britain is a nation awash in public and private debt. Social Services and health care stressed to breaking with immigration. Money printing and borrowing rampant. The Central Bank monetizing their debt. In fact, without money printing, the UK fiscal situation would break in one day. Yet they are doing fine! Held up as Europe's bright spot.
These two nations experience should tell you something. One is AMerica's absolutly loyal lap dog whore nation who will only ask "how high" when told to jump.
The other nation Russia. Who earns money through resources and industry, not printing. WHo has good FX reserves, has stock piled gold for years, has a very favorable debt to GDP, a population largely un leveraged, and earth's most vast resource base. And they are imploding at near light speed.
Do you need to know more. I can not know or prove what causes a bankrupt nation to SOAR! And a solid, well funded, unleveraged, nation of productive earnings instead of money printing, and owning earths greatest resouce collection. How it collapases under a torrent of speculation driving it to bankruptcy in a few days.
BUT, does anyone believe this is due to fundamentals? Is this real market action? Come on! We know it is not. We can suppose, quite safely, that this is a coordianted global attack of economic warfare by the USA, and it's army of minions. The other "market driven" possibility seems ludicrous.
JB, I do not disagree with your points or thesis, but I think you and many here are missing the point:
It is not about how things "OUGHT" to be, but about how they "ARE". They are manipulated, controlled and speculated.
A "normal" person just can't dress for this kind of weather, or invest with confidence.
I would have thought we had all learned this buy now.
Noben, if you are billionaire , you can skip it.
If not, you've just proven that it is all propaganda, manipulated market price propaganda, things as, they want you to think, are and not as they are in themselves as verifiable facts.
In this world as it is, they will never risk their power or wealth. However, they will recklessly risk your wealth, your security or safety. And when they try to rob you blind with lies that it’s for your own good, and you complain, they say, that's how things are and not as they ought to be.
So you say, perception is truth? No. Perception of powerful is YOUR “truth”. That's the way they want it, you on your knees, confused, questioning what’s real and searching for truth in Liars Den.
It will continue as long as we believe in sweet little lies and not in demonstrable fundamentals (more or less closer to truth).
You can believe in, what you want to believe, but you will never be fully insulated from harsh reality. So what color of pill would it be? Read or Blue.
You can help end the games forever. Convert all the essentially fraudulently priced financial assets to gold. We are dealing with decades of distributionally driven demand destruction from the fractional reserve banking ponzi. What is happening in Russia is simply an attempt to obfuscate the real cause. TBTJ know it is a ponzi... The system will collapse without our submission and support (what would happen if all of us took 5% of our assets out in cash?).
Convert $ for $ without leverage. .
Little is as it appears when it comes to International Finance and Politics.
Just now we learn that Putin has "No regrets" of pardoning the Russian-Jewish oligarch Khodorkovsky, whom he jailed for 10 years. Heck, he says that Khodor even "has the right to enter politics... as a Russian citizne". WTF!!!
You heard it here first... but I predict that the way things have been developing in the last week, that Khordo will not only run for office, but will replace Putin in the next election (in a couple of years or so). Unlikely as it seems.
A lot has happened in 1 week. A lot more can happen in 1-2 years. Hope I'm wrong, but mark my words.
there is a lot of man-love for Putin here on ZH, and the sad thing is that the man-lovers don't realize how cute they really are.
chill out and bong appetit.
Hey, le russophobe, la prochaine fois que t'essayes de parler Français, fait le correctement --> Bon appétit !
kak dyela?
I imagine Obama would more closely fit your man lover description... Yes?
nope.
this other dude is the object of my man-love.
Ruble is not at 80 but stabilized between 60 and 62 so the collapse is stopped. Why ? Because you can't short it at 50X anymore and make speculative attack, which is a good thing. There is no capital control but leveraged speculation is severely impeded.
So if the Russian Central Bank backed a relatively large bond issue by a domestic company isn't that kinda like setting off a dirty bomb? It doesn't make sense. Gotta be something else going on.
The CB backing of the bond issue makes sense if you were a Putin crony with nowhere else to borrow and could pillage the CB. Rosneft had a plan to roll over the bonds, a once reasonable expectation. Now no cash and no access to western credit. That ruble bond sale gets the rubles to exchange, even if at a bad exchange rate.
If the alternative, is foreign financial interests acquiring strategic domestic assets at firesale prices, then there is an argument for using State assets to purchase senior convertible bonds, since the alternative (over the intermediate term with no change of markets) would be expropriation, which opens certain treaty doors that the Kremlin might not be keen on opening (yet).
They could try QE, except the ruble is worthless already.
Wonder if Putin owns a nail gun?
They use poison-dart vodka guns.
86 Dec 18, 2014 9:30 AM EST
By Leonid BershidskyA mere two weeks after delivering a weak, stumbling state-of-the-nation address, Russian President Vladimir Putin is back on form as a consummate populist demagogue. His confident performance, and his combative answers to questions that obviously were not pre-approved, seemed designed to demonstrate that he was in control of Russia's economic situation and not about to back down from his aggressive stance on foreign policy. Putin projected confidence that Russians will stick with him even if they grow poorer.
Yesterday, Alexander Tkachev, governor of Russia's southern Krasnodar region, told Russians they'd better tighten their belts to pay for the annexation of Crimea in March: "Didn't we all applaud, didn't we all say it was great, we'd done great, Crimea was ours? That means we must share not just the responsibility, but also this burden, these losses." It sounded like a reasonable, pragmatic line to take, but Putin knew it was untenable: According to a recent Levada Center poll, only 6 percent of Russians are willing to put up with falling incomes in exchange for territorial gain.
Putin's spin today on why Russians should stick with him through the hardship was different:
This tirade shows why Western leaders have found it impossible to talk reasonably with Putin. He appears so out of touch he could have been from another planet. The U.S. grabbing Texas from Mexico? An invasion of Siberia by covetous Westerners? Seriously? It's useless to point out to him that Texas' secession from Mexico in 1836 resulted from a revolution, not a land grab, and ended in Texas setting itself up as an independent state for the next ten years; it makes no sense to tell him the story of former U.S. Secretary of State Madeleine Albright complaining about the unfairness of resource distribution is apocryphal, a Russian invention.
In a certain sense, Putin is still living in a 19th century of his own making: his comments on Ukraine, Russian history, geopolitics or the economy range from mildly untrue to fantastical. So how can foreign interlocutors expect to hold a reasonable conversation with the man?
In truth, there's very little evidence that Putin is interested in a reasonable conversation with his Western counterparts. He has become entirely consistent in offering the same emotional narrative to all audiences; his rhetoric is a bizarre kind of political shiatsu that only hits the right spots when the listener is sympathetic from the start. If it doesn't work with someone, Putin doesn't care. Answering a question on whether he feared a palace coup, he said:
Putin wears that support -- which still stands above 80 percent, according to polls -- like armor. At the press conference, he was happy to take a question from a Ukrainian journalist in a sweatshirt bearing the logo "Ukrop," pro-Russian separatists' derogatory name for Ukrainian troops, and didn't bat an eye when the question turned out to be about Russian soldiers dying in eastern Ukraine. (They were there because their heart called them, Putin said.) The anti-Kremlin TV channel Dozhd asked him about how he could tell the Russian opposition apart from a fifth column doing the West's bidding, and a provincial reporter queried him about his friends getting rich during his rule. His answers were glib and sarcastic, and contained no revelations except for his belief that Russians will back him regardless of the economic circumstances.
As I have said before, it's a gamble. As in the state-of-the nation address, Putin did not spell out a coherent policy for dealing with low energy prices and Russia's subsequent currency crisis. He did let on that he was holding "friendly" conversations with the owners and managers of big companies, leaning on them to sell more hard currency, and that the conversations were having an effect. Today, the daily newspaper Kommersant reported that state companies would be hit with a mild form of capital controls, forcing them to convert dollar and euro revenues into rubles, and that large private companies would be "monitored" for compliance with this policy.
That may help slow the ruble's decline. These days, it makes sense to watch Putin's speeches on a split screen, one half showing his tense posture and the other displaying the ruble's exchange rate against the dollar. Throughout the speech, rate volatility remained low, the ruble sinking momentarily when Putin deployed his bear analogy, only to later make up the loss. At about 61 to the dollar, the ruble is now way above its historic minimum of 77 to the dollar, reached on Tuesday.
Putin today repeated like a mantra that the currency crisis had "external reasons" and that it would blow over within two years as Russia adjusts to low oil prices. The aggressive rhetoric from the Russian leader is meant to tide his supporters over during that magical "adjustment." It's a depressing response for those who thought economic strain would make him more malleable. Putin is thinking more, not less, about why a bear needs his teeth and claws.
You forgot to mention that the West has been undermining sovereign states for 70 years. You also ignore the Grand Chessboard that makes intentions of the West abundantly clear.
Default is a Russian master stroke should it choose independence. Western financial structure will not survive as it did in 1998. Those bullets are already gone.
18 weeks and 4 days on ZH... your a plant.Simple as that.
Why ZH? Is it somehow dangerous to the system? What are you and your ilk afraid of? Peace? Must be,,, because Russia has done nothing to the u.s or nato other than stop their bombing of defenseless nations.
Without wars, you know the u.s financial system and economy is about to burst... 600+ points in two days on the Dow show just how bad and manipulated it is and your posts indicate the fear of those running this criminal system you seem to advocate.
Your posts are laughable and imbecilic, mirroring the actions of the illegal government/s you support.
qustion to American Patriot:
What exactly about "Amerikkka" are you patriotic about? the 400+ years of slavery? The Native American genocide? The fake beginings of WWII, the fake Pearl harbor attack, the fake Gulf of Tonkin attack, the fake 9-11 attack, the Snowden's revelation that the US gov spies on its citizens, the fake wars on terror, the 1% of Americans owning 50% of all wealth in USA, the lies of SHrub. Chenye, Obama about imaginary WMD, fake Al Queda, fake ISIS, what exactly, please tell us once and, for all?
Wow the governemnt is that good. They've able to keep all this duplicity secret from everybody but you. You're on to them. They can't get anything by you. Thank God you're here to tell us the truth and show us the light. You're special snowflake.
More copyright infringement.
the twit with no opinion has vomited again. hello a**hole. LMAO
Cut and paste King - is here again...
By Timothy Heritage and Alexei Anishchuk
MOSCOW Thu Dec 18, 2014 2:55pm EST
(Reuters) - President Vladimir Putin assured Russians on Thursday that the economy would rebound after the ruble's dramatic slide this year but offered no remedy for a deepening financial crisis.
Defiant and confident at a three-hour news conference, Putin blamed the economic problems on external factors and said the crisis over Ukraine was caused by the West, which he accused of building a "virtual" Berlin Wall to contain Russia.
At times sneering, at others cracking jokes, he ignored pressure to say how he will fix an economy facing what his economy minister calls a "perfect storm" of low oil prices, Western sanctions over Ukraine and global financial problems.
The rouble has fallen about 45 percent against the dollar this year, and suffered particularly steep falls on Monday and Tuesday, but Putin refused to call it a crisis and said it would eventually rise again.
"If the situation develops unfavorably, we will have to amend our plans. Beyond doubt, we will have to cut some (spending). But a positive turn and emergence from the current situation are inevitable," Putin said in comments to a packed conference center that were broadcast live to the nation.
Although he said the recovery might take two years, much will depend on how long the West maintains sanctions on Russia over its role in the Ukraine crisis.
European Union diplomats said the 28-nation bloc would ban investment in Crimea from Saturday over Russia's annexation of the Black Sea peninsula and President Barack Obama is set to sign legislation authorizing new U.S. sanctions.
But Putin showed no sign of heeding a call by EU foreign policy chief Federica Mogherini for "a radical change in attitude toward the rest of the world and to switch to a cooperative mode".
Sitting at a big desk in front of two large screens showing close-ups of his face, a white mug with a presidential crest on beside him, Putin appeared mainly intent on showing Russians he is in command and will not kow-tow to the West.
DIVERSIFICATION PLEDGE
The former KGB spy said Russia must diversify its economy to reduce dependence on oil, its major export and a key source of state income, but he gave no details and has said many times during 15 years in power that he will do this.
The rouble slipped as he spoke, and was about 2 percent weaker against the dollar on the day. The central bank increased its key lending rate by 6.5 percentage points to 17 percent on Tuesday, and has spent more than $80 billion trying to shore up the rouble this year, but to little avail.
Although Putin said the central bank and government had acted "adequately", he chided the bank for not halting foreign exchange interventions sooner, suggesting more decisive action might have made this week's big rate rise unnecessary.
"All this implies pretty big divisions within the administration as to how to react to the crisis and pressure on the rouble," said Timothy Ash, head of emerging market research at Standard Bank in London, adding that heads could roll.
Neil Shearing, chief emerging markets economist at Capital Economics in London, said Putin signaled no change of policy and capital controls remained "a measure of last resort".
"Whatever happens, a deep recession now looms," he said.
Putin's popularity has soared over the annexation of Crimea but the ruble's decline could erode faith in his ability to provide financial stability, an important source of his support.
An opponent, former Prime Minister Mikhail Kasyanov, said problems would mount as prices are expected to surge next year and Putin would need "an exit strategy" to leave power.
But Putin said he felt the "support of the Russian people", though he had not decided yet whether to seek a new six-year term in an election due in 2018.
Asked about Ukraine, where Russia has irked the West by backing pro-Russian separatists fighting in two eastern regions, Putin said Moscow wanted a political resolution to a conflict that has killed 4,700 people.
He also called for "political unity", suggesting he does not intend to annex the regions that have rebelled, and avoided calling them "New Russia", a phrase he has used in the past.
But he blamed NATO for the worst relations between Moscow and the West in decades.
"Didn't they tell us after the collapse of the Berlin Wall that NATO would not expand eastwards? But it happened immediately. Two waves of expansion. Is that not a wall? ... It's a virtual wall," he said.
question to American patriot:
What exactly about "Amerikkka" are you patriotic about? the 400+ years of slavery? The Native American genocide? The fake beginings of WWII, the fake Pearl harbor attack, the fake Gulf of Tonkin attack, the fake 9-11 attack, the Snowden's revelation that the US gov spies on its citizens, the fake wars on terror, the 1% of Americans owning 50% of all wealth in USA, the lies of SHrub. Chenye, Obama about imaginary WMD, fake Al Queda, fake ISIS, what exactly, please tell us once and, for all?
American Patriot is now blowing other peoples wind.
Ameri-can't Parrot -- a master of copy/paste and witless put-downs.
Do we really want to feed this guy's fantasies of being the next MDB? And if he's a troll for a bigger Troll, then he still needs Hits. If I may, I recommend: Ignore him. Starve him out.
Isn't that copyright infringement?
the twit with no opinion has vomited again. hello a**hole. LMAO
The Fed's trading desk
When I read that article above, it was being given an average rating of 1.5 on 23 votes, and I too gave the article above a 1 star rating, as a poor article. Most of the comments above, in proportion to their up votes, were superior to the article! As the first comment pointed out, this is the manifestation of "economic warfare," as explained by the video already linked above by Paveway IV:
https://www.youtube.com/watch?v=VT085isnyB0
Central Bankers suppressing Russian economy
What annoyed me the most was the silly superficiality in this phrase: "the Russian central bank has been unable to stop the slide," which presents a similarly shallow view as those who pretend that the American Federal Reserve Board cares about the American people in general. The piss-poor article above presents the mainstream moron's view that somehow the central banks are "good guys," rather than the most evil people on the planet, wherein each national central bank is the national King of Fraud, while the Bank of International Settlements is the King of Kings of Fraud.
My favourite quote from Carroll Quigley:
“powers of financial capitalism
had another far-reaching goal,
nothing less than to create a
world system of financial
control in private hands
able to dominate the
political system of
each country and
the economy of
the world as
a whole …”
The currently established systems of debt slavery, backed by wars based on deceits, were made and maintained by the best organized gangsters, those international banksters, "able to dominate the political system of each country and the economy of the world as a whole." There is no reasonable doubt that they were able to persistently apply the methods of organized crime to the political processes, in order to reduce the vast majority of politicians to their puppets, who are voted for by enough of the masses of muppets, in order to perpetuate the vicious spirals of the social pyramid systems.
The deeper history was that of warfare selecting for the War Kings, who made and maintained the sovereign states, whose powers were covertly captured by the Fraud Kings, the international banksters. Identifying who may currently be considered to be the international banksters, and which people are working for them, barely scratches the surface of the deeper problems.
The international banksters, etc., may well have made and maintained the systems that exist now, and they may well have an agenda for the continued development of their social pyramid systems in the foreseeable future. However, since their social successes were based on being able to back up lies with violence, INSIDE human societies, developing systems of legalized lies, backed by legalized violence, through their control over the national political processes, THEY ARE NO LONGER IN CONTROL … NOBODY IS IN CONTROL!
The world has become globalized systems of electronic monkey money, backed by apes with atomic bombs, which are way more criminally insane than anyone is able to fully understand, because their “successes” were based on being able to back up their lies with violence INSIDE human societies, which enabled those societies to develop attitudes of evil deliberate ignorance towards everything OUTSIDE of that, which was relatively beyond the boundaries of that sort of social control. The established systems are based on entrenched ENFORCED FRAUDS, wherein “money” is measurement backed by murder.
The astonishing degree of “success” of social pyramid systems, based on being able to back up lies with violence, has enabled a tiny, tiny, tiny minority of the population to effectively control the vast majority. However, that “achievement” is profoundly paradoxical, since it requires that the vast majority of people adapt to live inside social systems which deliberately ignore rational evidence and logical arguments, in order to continue to be socially “successful” within systems of ENFORCED FRAUDS, enabling attitudes of evil deliberate ignorance, AS AROUND AND AROUND WE GO, IN THOSE VICIOUS SPIRALS, GETTING WORSE, FASTER!
The international banksters are implementing a criminally insane agenda, which automatically becomes more criminally insane the more “successful” that becomes! The paradoxes we face are precisely due to the final consequences of systems of legalized lies, backed by legalized violence, being able to control civilization, in ways which worked all too well in the short-term, but whose longer term consequences become worsening criminal insanities faster and faster …
Indeed, the ruling classes are attempting to carry forward their agenda of consolidating a globalized system, wherein they will continue to be able to create the public “money” supply out of nothing as debts, which situation everyone else will be forced to continue to accept and adapt to live within. However, the more “successful” those systems of enforced frauds become INSIDE SOCIETY, the more criminally insane that society becomes as a whole OVERALL.
Human civilization is almost totally based on being able to back up lies with violence, with the international banksters being the ones that are currently the “best” at doing that. Instead of society paying proper attention to any relatively objective, real environmental limits, the established systems of making “money” out of nothing to “pay” for strip-mining the planet’s natural resources continue to be able to double down, again and again. When a country like Russia seriously attempts to get out from under the control of the globalized ruling classes, then it is targeted for destruction, while the international banksters doing that are able and willing to seriously risk a world war using weapons of mass destruction!
OUR CIVILIZATION DELIBERATELY IGNORES RELATIVELY RATIONAL EVIDENCE AND LOGICAL ARGUMENTS WHICH WOULD CONTRADICT THE ABSURD HUGE LIES THAT DOMINATE EVERYTHING.
Ruble Run Insanity"In the matter of a couple of days here, the financial INSANITY game being played has gone from senile dementia to psychotic ..."
The USA is now going to overtly intervene in the Russian government to promote "regime change". From the House of Representatives Russian sanction bill:
SEC. 9. SUPPORT FOR RUSSIAN DEMOCRACY AND CIVIL SOCIETY
ORGANIZATIONS.
(a) IN GENERAL.—The Secretary of State shall, directly or
through nongovernmental or international organizations, such as H. R. 5859—14
the Organization for Security and Co-operation in Europe, the
National Endowment for Democracy, and related organizations—
(1) improve democratic governance, transparency, accountability,
rule of law, and anti-corruption efforts in the Russian
Federation;
(2) strengthen democratic institutions and political and
civil society organizations in the Russian Federation;
(3) expand uncensored Internet access in the Russian Federation;
and
(4) expand free and unfettered access to independent media
of all kinds in the Russian Federation, including through
increasing United States Government-supported broadcasting
activities, and assist with the protection of journalists and
civil society activists who have been targeted for free speech
activities.
Talk about poking the Bear, this is clubbing it with a 2 x 4! It isn't going to cause much damage but it will sure get the clubber some of the Bear's attention.
As an aside; which regime is it that has an anti whistle blower and alternative journalist campaign, and "runs" a country whose government is controlled by the uber wealthy? I think it starts with an "O".
That is language of fucking directly with Russian soil and matters. Serious stuff to put down on paper.