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Russian rouble suffers steepest drop in 16 years

Rogue Valley

Rogue Valley

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Russian rouble suffers steepest drop in 16 years
December 16, 2014

MOSCOW (Reuters) - The rouble plunged more than 11 percent against the dollar on Tuesday in its steepest intra-day fall since the Russian financial crisis in 1998 as confidence in the central bank evaporated after an ineffectual rate hike. It has now fallen close to 20 percent this week, taking its losses this year against the dollar to more than 50 percent and stirring memories of the 1998 crisis when the currency collapsed within a matter of days, forcing Russia to default on its debt. The central bank's First Deputy Governor Sergei Shvetsov said the bank would implement more measures to stabilize the currency market, calling the situation "critical".

Source
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The Russian ruble has lost 50% of its value against the dollar this year. Analysts now predict that the Russian economy will contract by 4.3-4.7% in 2015 which is higher than the contraction which led to the US Great Depression. On Sunday the Russian Central Bank raised interest rates from 10.5% to 17% in a desperate attempt to staunch the ruble's free-fall and capitol flight. It didn't work. There are now three negative forces at play feeding on one another... plunging oil prices, Western sanctions, and panic in the commercial and public sectors to divest portfolio's of the ruble before it becomes worthless. The only choices left now are spending billions in foreign reserves every day to artificially prop up the ruble or to implement capital controls that forbid currency conversions. Neither option is palatable nor guaranteed to staunch the economic bleeding.
 
destabilizing Russia's economy does us little good. it would be nice if we could stop pissing around with the globe and fix our own problems instead.
 
Helix said:
destabilizing Russia's economy does us little good. it would be nice if we could stop pissing around with the globe and fix our own problems instead.
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While I agree with your sentiments, I'm doubtful that our sanctions are doing much damage to Russia.
I think the plunging oil prices are the problem.
If Russia hadn't marched into Crimea, maybe the rest of the world would be more sympathetic to their plight.
 
radioman said:
While I agree with your sentiments, I'm doubtful that our sanctions are doing much damage to Russia.
I think the plunging oil prices are the problem.
If Russia hadn't marched into Crimea, maybe the rest of the world would be more sympathetic to their plight.
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plunging oil prices were a big part of the sinking of the soviet union, too. but in this case, we look like a convenient demon. it would be nice if we would have just stayed the **** out of it.
 
radioman said:
While I agree with your sentiments, I'm doubtful that our sanctions are doing much damage to Russia.
I think the plunging oil prices are the problem.
If Russia hadn't marched into Crimea, maybe the rest of the world would be more sympathetic to their plight.
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They did not march into the Crimea (in force) until there was a referendum that went overwhelmingly in Russia's favor.

If anything was illegal, it was the coup that overthrew the legally elected (though corrupt) leader of the Ukraine. Those idiot rebels that did that could have avoided almost all of this mess if they had just waited a few months for the next general election.

And it is the same thing in the Donetsk region - Russians did not intervene until after the referendum that again was overwhelmingly in Russia's favor.

And why is it horrific if Russia marches into the Crimea after a referendum (granted, there were some troops there before - but there were U.S. troops in Iraq and Afghanistan when they had their elections) BUT it is fine when America invades, bombs and embargoes (like Cuba) anyone they feel like?

Now Putin is no saint. In fact, he is probably a pig. But I see what Russia has done as only a fraction as bad as what America has done over the past 5-10 years.
 
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Helix said:
plunging oil prices were a big part of the sinking of the soviet union, too. but in this case, we look like a convenient demon. it would be nice if we would have just stayed the **** out of it.
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When do you think we should get involved in foreign affairs? Ever? Under what circumstances?
 
Redress said:
When do you think we should get involved in foreign affairs? Ever? Under what circumstances?
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when they bomb Pearl Harbor, and invasion looks like a real possibility.
 
...Putin is owning Obama. :lol: He's a chess player and Obama plays checkers! Obama is a fool who doesn't know what he is doing! Imagine if the dollar's value dropped by half within 2 years. Republicans would have a field day rimming Obama for it. However, Putin has done just that, and he's... the strong leader Obama should fear? Lmao.
 
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DA60 said:
They did not march into the Crimea (in force) until there was a referendum that went overwhelmingly in Russia's favor.

If anything was illegal, it was the coup that overthrew the legally elected (though corrupt) leader of the Ukraine. Those idiot rebels that did that could have avoided almost all of this mess if they had just waited a few months for the next general election.

And it is the same thing in the Donetsk region - Russians did not intervene until after the referendum that again was overwhelmingly in Russia's favor.

And why is it horrific if Russia marches into the Crimea after a referendum (granted, there were some troops there before - but there were U.S. troops in Iraq and Afghanistan when they had their elections) BUT it is fine when America invades, bombs and embargoes (like Cuba) anyone they feel like?

Now Putin is no saint. In fact, he is probably a pig. But I see what Russia has done as only a fraction as bad as what America has done over the past 5-10 years. And a tiny fraction at that.

And Neocons who disagree? Save it - I have NO respect for your opinions on this subject. NONE AT ALL...you people are a far bigger problem for America then all terrorists in the world combined, imo.
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I'm no neo-con and hopefully that group has been marginalized for the foreseeable future.
I'm not going to defend my country's bumbling in the M.E.
The fact is, Russia did march into the Crimea.
Now their economy is sunk.....live with it.
When China decides to exercise it's historic claims on Siberia, they will use the same rationale as Putin has used in the Ukraine.
 
Helix said:
plunging oil prices were a big part of the sinking of the soviet union, too. but in this case, we look like a convenient demon.[/COLOR] it would be nice if we would have just stayed the **** out of it.
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Oh, hell.....we're always a convenient demon.
Sometimes we actually are that demon.... this time, not so much.
 
radioman said:
While I agree with your sentiments, I'm doubtful that our sanctions are doing much damage to Russia.
I think the plunging oil prices are the problem.
If Russia hadn't marched into Crimea, maybe the rest of the world would be more sympathetic to their plight.
Click to expand...

Oh hell, I break out my violin for Russia.

Tiny-Violin.jpg
 
radioman said:
While I agree with your sentiments, I'm doubtful that our sanctions are doing much damage to Russia.
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Correct. Sanctions are the least of their problems. Russia is a petro-state and the plunging global price of oil is rendering their economic system as unsustainable. Loss of faith panic in the ruble is now ensuing and everyone who can is now racing to convert their ruble holdings to more stable currencies. They are willing to take a loss now rather than gamble and lose everything down the road.

In an economic-health sense, Russia is becoming Venezuela.
 
Simpleχity;1064100161 said:
Correct. Sanctions are the least of their problems. Russia is a petro-state and the plunging global price of oil is rendering their economic system as unsustainable. Loss of faith panic in the ruble is now ensuing and everyone who can is now racing to convert their ruble holdings to more stable currencies. They are willing to take a loss now rather than gamble and lose everything down the road.

In an economic-health sense, Russia is becoming Venezuela.
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Funny how things work out.
A few months ago, the USA was belittled--by some--as an impotent force, unable to stop Putin's land grab.
Now, Russia's economy and Putin teeter on the brink.
Bad karma, Vladimir.
 
Maybe Putin will invade Afghanistan again and get those war machine makers to up their economy.
 
AJiveMan said:
Maybe Putin will invade Afghanistan again and get those war machine makers to up their economy.
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Poor, sad Afghanistan.
Landlocked perpetual economic basket case.
Warlords, one crappy gov't after another.
The target of endless failed occupations.
What's the attraction?
Aside from opium, what do they produce?
I hear rumblings about pipelines and valuable minerals, but nothing ever seems to happen.
I'm grateful everyday that I was born in America.
 
Everything is just beginning;)
 
radioman said:
Poor, sad Afghanistan.
Landlocked perpetual economic basket case.
Warlords, one crappy gov't after another.
The target of endless failed occupations.
What's the attraction?
Aside from opium, what do they produce?
I hear rumblings about pipelines and valuable minerals, but nothing ever seems to happen.
I'm grateful everyday that I was born in America.
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Afghanistan - Wikipedia, the free encyclopedia

The country's natural resources include: coal, copper, iron ore, lithium, uranium, rare earth elements, chromite, gold, zinc, talc, barites, sulfur, lead, marble, precious and semi-precious stones, natural gas, and petroleum, among other things.[137][138] In 2010, US and Afghan government officials estimated that untapped mineral deposits located in 2007 by the US Geological Survey are worth between $900 bn and $3 trillion.
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Rare earth element - Wikipedia, the free encyclopedia
 
radioman said:
While I agree with your sentiments, I'm doubtful that our sanctions are doing much damage to Russia.
I think the plunging oil prices are the problem.
If Russia hadn't marched into Crimea, maybe the rest of the world would be more sympathetic to their plight.
Click to expand...

Yeah, Putin has backed himself into a corner diplomatically.Russia has literally nothing to offer opponents and allies other than threats.
 
radioman said:
Poor, sad Afghanistan.
Landlocked perpetual economic basket case.
Warlords, one crappy gov't after another.
The target of endless failed occupations.
What's the attraction?
Aside from opium, what do they produce?
I hear rumblings about pipelines and valuable minerals, but nothing ever seems to happen.
I'm grateful everyday that I was born in America.
Click to expand...

The mineral story is a dead end. The deposits have been known to exist for a long time but they are too deep underground to be economically feasible to harvest.
 
Simpleχity;1064100161 said:
Correct. Sanctions are the least of their problems. Russia is a petro-state and the plunging global price of oil is rendering their economic system as unsustainable. Loss of faith panic in the ruble is now ensuing and everyone who can is now racing to convert their ruble holdings to more stable currencies. They are willing to take a loss now rather than gamble and lose everything down the road.

In an economic-health sense, Russia is becoming Venezuela.
Click to expand...

Indeed. Remember that it wasn't so long ago that Russia was boasting that it was their goal to have the rubble become the defacto currency for trading oil.

Oh how fortunes change.
 
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