Russian Currency Collapse

[KB]

Looks like Putin over estimated is ability to influence geopolitics and the strength of the Russian economy..

The recent fall in oil prices combined with the economic sanctions have caused the Rouble to lose 60% of it's value since the start of the year and 20%+ in the last 48-72 hours. The slide seemed to subside a little this morning but it may not matter much.

Yesterday the Rouble to Euro exchange rate jumped and was 100 Roubles for 1 Euro

http://www.themoscowtimes.com/busin...s-dollar-as-free-fall-accelerates/513387.html

Today Finlad's Forex stopped buying Roubles

http://yle.fi/uutiset/rouble_collapse_hits_finland_forex_stops_buying_russian_currency/7694302

Russian citizens lining up to exchange Roubles for Euro's or USD, those that can't have been advised to buy electronics and other goods before the prices inflate and the currency (pic of line below)

http://imgur.com/a/E7NGf

http://www.cnbc.com/id/102273163?


Putin's bakers (super rich Russians) have already lost close to 50$ billion in net-worth

http://money.cnn.com/2014/12/16/news/russia-billionaires-putin-losses/index.html?hpt=hp_bn1


Some of the internal bankers fear that the economy will not recover anytime soon and may end their current banking system. Some banks so the profits they made over the whole year wiped out in 48hrs.

http://uk.businessinsider.com/russian-currency-crisis-rates-vedomosti-2014-12?r=US


Steps taken by Russia today to try and slow the fall

http://www.bloomberg.com/news/2014-...lide-since-1998-as-russia-crisis-worsens.html

Russia won't be able to use Cuba this time like they did in the 80's, US announced today it's opening an embassy there.

http://www.thedailybeast.com/cheats...from-cuban-prison.html?source=TDB&via=FB_Page

They may turn to "crazy" in North Korea though

http://www.reuters.com/article/2014/12/17/us-northkorea-russia-idUSKBN0JV09E20141217



If the price of oil stays down for a pro-longed period of time I would imagine that the Russian economy will fail and Putin will no longer have power. Not that I'd expect Putin to go without making some noise so i wouldn't be surprised to see a power struggle develop or Putin attempt a power play on the world stage if it becomes evident that he be will ousted.

If mods feel like this should go into a different thread please feel free to move it

 

[brownindian]

So the sanctions are working ?

 

[Soda]

Russia is in need of a reality check just about as much or more than any other country on this planet. I'd imagine that not unlike North Korea, they're going to issue threats as their response.

 

[KB]

Russia is in need of a reality check just about as much or more than any other country on this planet. I'd imagine that not unlike North Korea, they're going to issue threats as their response.

I"m at work so can't find the source atm but from what I understand the state run Russian media is already blaming the "west" for this..

This was awlays going to happen sooner or later as Russia basis 40-50% of it's economy (GDP) off of exporting natural gas and oil. (just my understanding of what I've read the past few days)

 

[Cratylus]

As a greedy American capitalist, I need to find a way to profit from this. Natedagg, any thoughts?

 

[AZ_]

Thanks Obama

 

[The Oi]

As a greedy American capitalist, I need to find a way to profit from this. Natedagg, any thoughts?

@natedagg

 

[Adam]

Thanks i wasn't up to date with whats going on. A few less russian oligarchs

As a greedy American capitalist, I need to find a way to profit from this. Natedagg, any thoughts?

Isn't the general rule if any great economy starts to go belly up, buy gold as thats what they are going to try to do

 

[natedagg]

Thanks i wasn't up to date with whats going on. A few less russian oligarchs


Isn't the general rule if any great economy starts to go belly up, buy gold as thats what they are going to try to do

I would buy RSX here. It's quite a discount from where it historically trades. Long Term Russia is going to team with the other BRICS and challenge the old guard of Western Europe, Japan, and US. All of the old guard has f-ed up gov't balance sheets, so to diversify one's holdings, I like Russia. Paying a 3.75 dividend that you can reinvest for probably a decade or so. Maybe buy 1/2 position then if any more trouble comes up, like big trouble like war or another currency issue, then buy another 1/2. That should work out well, IMO.

 

[brownindian]

Is it the oil prices that caused the collapse?

 

[macbdog]

Is it the oil prices that caused the collapse?

Big part of it. Having alienated your former economic allies who could help you stem the tide is another. Bungling the internal response is yet another. I don't claim to know the ins and outs of this but I can't imagine this will not have a negative effect I the Wests economy here soon. While Russia had cut so many ties in the last year not all lines are cut plus what happens to the economies with ties to both, like Turkey? West will be effected at some point.

I think Putin's silence on all of this so far is kind of scary. Dude didn't give a shit I invading Ukraine, wonder what he may risk now?

 

[brownindian]

What is interesting is who will feel the pinch more - cos if i m readin some of the business reports even the US is getting affected. A lot of towns that were booming with the fracking adventure are now in critical zone as the amount of money spent to produce a barrel of oil is far less than the amount of money that it can be sold for.