Russian ruble falls to historic lows


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The ruble plummeted into a free fall, losing as much as 19 percent as panic swept across Russian financial markets after a surprise interest rate increase failed to stem the run on the currency.

 

The ruble plunged to as weak as 80.10 per dollar, a record low, before trading at 72.90 by 5:18 p.m. in Moscow, as Russians scrambled to convert their money into dollars amid concern the government will implement currency controls to slow the outflows. Bonds fell as the RTS stock index tumbled the most in almost six years. Government officials will gather to discuss the financial crisis engulfing the country.

 

Read more at:

 

http://www.bloomberg.com/news/2014-12-16/ruble-snaps-six-day-loss-on-surprise-rate-increase-to-17-percent.html

 

 

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Couldn't have happened to a nicer bunch of thuggish expansionists.

(I shouldn't be so flippant, given the example of Depression-era Germany; but it's hard to or me to muster much sympathy here.)

 

"Thuggish" is the perfect word for this.  Schadenfreude isn't a skill I list on my resume, but after watching the recent events in Russia I may have to add it. 

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The problem is that the thugs and murderers don't feel the pinch. The Soviet is alive and well and living under an assumed name. It's the Russian in the Moscow streets who gets it in the shorts, then goes looking for more vodka to help him cope.

 

Sadly, this is very true.  I once heard a Soviet joke about a factory manager who was under pressure to increase production.  He implemented ever harsher measures to whip the workers into greater productivity: longer hours, no sitting on the job, no heat during winter, and those sorts of things.  Nothing worked.  Finally the manager announced that every day one worker would be randomly selected and hanged.  He asked if there were any questions.  One person raised his hand and asked (and this was the punch line of the joke): "Will you provide the rope or should we bring it ourselves?" 

 

The Russian people have been through a lot.  I hope things change soon.

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Yesterday was the day Russia lost the economic war with the US.

Now, we're just watching to see how he responds. Siege economy tactics? Let the Rouble free-fall and hope for a rally on the energy sector?

What he does next could show his hand. If anything, it'll be useful to know if he planned war from the beginning or if he just planned on saber rattling to get his nation more respect and power on the international market. If it's the second, things'll get back to normal first. If it's the first, expect a very strong response.

The problem is that if it's the second, Mr. Putin will be shown as weak. Russia has never traditionally worked well with weak leaders.

Expect big changes regardless. Unless Putin is smarter than me(Which he is) and he sees an option I don't see.

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