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Senior Advisor

Russia - Splat !

An emergency interest rate hike overnight from 10.5 to 17% interest. The ruble crashed 10% Monday. Domestic durable goods are being bought out in an effort to exchange rubles before they have less value. Grain commodities are a hedge against the value of the ruble but may be cashed in on before Russia restricts exports. Of course this may trigger a form of Russian export restriction to feed their skinny chickens after blocking imports from the northern hemisphere. And even Brazil will want proper payment for meat. Doesn't take much to feed the oligarchs but the rest of Russia isn't going to take this lying down in my opinion. Nothing like a popular leader when he suddenly can't deliver the goods.

 

No doubt in my mind that Putin will be gone within a year. And had we gotten militarily involved in Ukraine energy prices would have skyrocketed and the Russian economy stimulated due to uncertainty.

 

Only one problem. Does Putin double down to distract people politically or find a way to save face and save their economy in a few years time? The oligarchs have got to be mad as wet hens at the policy so far. What have they gotten for it? Crimea and the rebels are a simple drag because they produce nothing and have to be supported completely. They take Ukraine and the problem is just that much worse.

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Advisor

Re: Russia - Splat !

Putin always seems scary to me. those short guys are always making up for their lack of stature by making a some type of disturbance. I've also had my own impression that since the fall of the fsu that the russian govt, the russian crime bosses, and putin were inextricably intertwined. Maybe i've watched too many crime movies......

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Senior Advisor

Re: Russia - Splat !

What do you mean the fall of FSU, didn't you see they were among the top 4.

 

Oh, I thought you were talking of the college football playoff series.  Smiley Very Happy

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Veteran Advisor

Re: Exporting mainly oil with a weaker ruble

should be great for the govt finance end there.

 

soooo the govt makes more and spreads some internally to soften the rest of the deall.

 

russia has under gone 5 to 6 total economic collapses over the past 60 years.

 

this is just another time.

 

 

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Honored Advisor

Re: Exporting mainly oil with a weaker ruble

Shaggy, He is just predicting the outcome of their next game.       Smiley Wink

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Veteran Advisor

Re: Exporting mainly oil with a weaker ruble

All one needs to remember about Putin is that he was trained by the KGB.

What do you think it takes for a KGB agent to get where he is now?

In an effort to "punish" Russia, markets will be affected/manipulated for quite some time.

 

By the way - some of us short folks prefer nothing other than peace and quiet.

I would like to limit my disturbances to working the ground!!

Just remember - when the bullets start flying the tall ones get hit first!! Smiley Wink

 

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Veteran Advisor

Re: Russia - Splat !

It is not in our favor to have an unstable
Russia.
the Russians have had difficult. Times for
A while.

The thing that is worrysome after recently
Seeing a show on hitler
The Russian people might support a
Nationalist.
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Contributor

Re: Russia - Splat !

I wouldn't be so sure about Putin being gone in a year. First, because I think he's one of those guys who needs to be in a position of power, one which he won't give up so easily. Second, because with the right propaganda and a little economic stimulus in some particular areas of the economy, he might buy quite some time.

I

n other words, finding an enemy to blame for your failures and creating some sort of program that gives money to the poorest sectors in the economy, even when it's just a couple of cents, might work just fine.

We, in Argentina, should know. Populism worked just fine for our govt ... Actually, it still does. We've had the same govt for the last 12 years!!!!

 

And remember that russians are an enduring people. They've been tormented in too many ways for centuries, and still they attempt to thrive. They've learned to take the bad things, live with it and carry on with their lives

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Senior Advisor

Re: Russia - Splat !

You make some good points but I think there are differences this time.

 

First, Putin is a known quantity and has already played the nationalist and populist cards - and they've worked, up til now. But I think the Russian's don't want to ride the curve back down. Which brings up the idea that Russian's aren't dumb and they've tolerated the suppression of media and dissent as long as things were getting better. They know how the land lays, and they know who's getting the most benefits.

 

Second are the oligarchs that use the new captialism to tilt things in their favor. The Russian people know about them. The oligarchs captured most of the resources and means of production. They are part of the leadership, and if they suppurt the leadership they're bullet proof, and if not they risk having their assets stolen by the in crowd headed by Putin. In this information age they are targeted by the global financial powers because of Russia's actions in Ukraine. The screws can be turned tighter on more of them - and they know that. Assets are frozen and travel restricted. There is no reason for them to continue with Putin as they don't benefit from Crimea and Ukraine.

 

Russia's resources, like oil and gas, are a two edged sword. They can be coverted into wealth and a state budget but they have to have markets. They can threaten Europe and Ukraine with shutting off gas but that would prove Russia's intent to try and rebuild empire by force (bad timing in a world depending on free trade) and force Europe's hand to develop the alternatives - and there are alternatives. If Europe either fracks or imports new fuel sources then Russia loses their markets forever and seals their fate to be isolated. Right now the Saudis are key and they're punishing Russia big time.

 

Argentine leadership made blunders and live with the fallout of those today. But they also didn't have resources that were in very high global demand or couldn't be replaced from elsewhere. The authoritatian leadership lost the people's confidence in the end. The same will be true for Russia.

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Frequent Contributor

Re: Russia - Splat !

Agree with alot of the above russians will back him to the hilt

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