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Ruble collapse shakes Russian economy, consumers

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By VLADIMIR ISACHENKOV and DAVID McHUGH

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Ruble collapse shakes Russian economy, consumers

Where are all the folks saying how "weak" Obama and his sanctions were now? Cat got your tongue?

0 ( +3 / -3 )

Economic warfare is just warfare by other means. If Putin feels he's being driven into a corner and has nothing to lose, this year's cold war could turn into a hot war by sometime next spring.

1 ( +1 / -0 )

Russia has the inflation, desperately sought out by Japan.

-1 ( +1 / -2 )

Where are all the folks saying how "weak" Obama and his sanctions were now? Cat got your tongue?

Right. And I remember comments to the effect that Russia has no debt, and I pointed out that it does - it's just placed on the balance sheets of so-called "private" companies that are actually the archipelago of kleptocracy under Putin's cronies that compose the Russian economy, and hence its financial basis.

These companies are now locked out of Western financial markets but still must repay tens of billions in Euros at a time when their debts in terms of rubles are skyrocketing. There is no way out - except, maybe, China? China has always had a legitimate claim on Siberia, and they'd likely pay good money - in hard currency - for it (but not too good; like the deal they got with Russian oil, they know how to negotiate with Putin when his back is to the wall).

1 ( +2 / -1 )

Barack Obama = winner. Vladimir Putin = loser.

I imagine the "Putin envy" neo-cons who inhabit this forum are giving this thread a wide berth.

1 ( +2 / -1 )

Laguna These companies are now locked out of Western financial markets but still must repay tens of billions in Euros at a time when their debts in terms of rubles are skyrocketing.

Now think a little - when they are out of Western financial markets why they must repay tens of billions in Euros ??

And what will do Western financial institutions if these companies declare a moratorium to pay these debts ?

Before joining the Crimea Russia prevented many times about Western actions and their results in Ukraine.....

After that it was TOO late...

0 ( +0 / -0 )

Apples to apples :

The US Federal Reserve only has a basic capital ratio of 1.26%. Talk about razor thin. (This is down from 4.5% just a few years ago)

On the other hand, the Russian central bank’s ratio is 12.5%—literally almost TEN TIMES GREATER than the Fed.

And then it's useful to consider a central bank's gold holdings:

GOLD reserves as a percentage of the money supply, i.e. how much gold backs the money supply.

In Russia, it’s 6.2%. And rising. Last year it was 5.5%, and the central bank is continuing to heavily stockpile more.

How much gold backs the dollar?

Precisely zero point zero percent. Zilch. Nada.

The Fed doesn’t own gold. It loudly proclaims this on its own website: “The Federal Reserve does not own gold.”

It holds ‘certificates’ which are redeemable for US dollars. But there’s not a single ounce of gold backing the US dollar.

So… with no gold and pitifully razor thin solvency levels, it really wouldn’t take much of a shock to topple the dollar.

By comparison, the ruble is much better capitalized and actually has something backing it.

Now, I’m not necessarily advocating to buy the ruble, but hard, publicly available numbers clearly demonstrate the discrepancy between “sentiment” and objective data.

I would look to see increased de-dollarization in the near future. The plummeting oil prices will hurt very many oil producers, but likely frackers hardest.

Much pain in the future near everywhere.

-2 ( +0 / -2 )

unfortunatley this economic proding of Russia will eventually lead to a response, everybody seems to forget that Russia is the other 300lb Gorrilla. Russia will respond through where it is strong, that is energy exports and its military. this wont end pleasantly

0 ( +0 / -0 )

A 300 lb gorilla still needs to eat...

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@John Galt

Gold no longer plays any role in the monetary system, so there's no reason for any central bank to hold it. Mind you, the Russians are so backward, they probably haven't figured this out yet.

-1 ( +0 / -1 )

Putin is a dictator. Perhaps this will finally force him out on his horse without a shirt on.

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JeffLee Gold no longer plays any role in the monetary system,

Just because of this US refused return to Germany its gold reserve (most of German gold WAS in Fort Knox)

Because gold no longer plays any role ...

Poor Germans theoretically they have second gold reserve in the world

Practically...

Gold no longer plays gold no longer plays.....

Hey! It is ANY gold in Fort Knox TODAY ???

-1 ( +1 / -2 )

Gold should have never been removed from the monetary system. It would have been impossible for the US to reach $18 trillion in debt if the gold standard was still in existence. However, liberals love welfare and conservatives love warfare.

0 ( +0 / -0 )

"It would have been impossible for the US to reach $18 trillion in debt if the gold standard was still in existence."

True, so blame Nixon. He ended it unilaterally. Then the deficit spending habit was started by Reagan almost as an official policy. Conservative politicians are America's most fiscally irresponsible people.

0 ( +0 / -0 )

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