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Ruble Rocket to Russia


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2014 Dec 15, 10:19am   4,158 views  17 comments

by RWSGFY   ➕follow (4)   💰tip   ignore  

http://streetwiseprofessor.com/?p=8996

The Professor @ 7:55 pm What a wild day. The Ruble weakened dramatically from the open this morning (15 December), falling about 2.5 percent. Then the Russian Central Bank intervened, spending a rumored $1 billion to prop up the currency. This caused about an 86 pip rally, but this lasted for mere moments, and then the Ruble rocketed lower, reaching 64.24 by the end of the day. That’s down a mere 10.22 percent boys and girls. (The weird thing about currencies quoted like the Ruble is that up is down.) Here’s the ugly picture. You can see the little bitty...

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1   Strategist   2014 Dec 15, 10:45am  

WOW! A 10% drop for a country the size of Russia is jaw dropping. It's nothing but panic. I am still in shock. They raised interest rates from 10% to 17% in one day. They are gonna run out of foreign exchange, and will be forced to sell all that gold they have been accumulating.
Their only exports....Oil and vodka, both on the rocks.
Nasdrovia comrade Putin.

2   RWSGFY   2014 Dec 15, 10:48am  

Don't forget that they don't have fixed-rate mortgages there, so everyone with a mortgage will feel the pain immediately.

3   Strategist   2014 Dec 15, 10:58am  

Straw Man says

Don't forget that they don't have fixed-rate mortgages there, so everyone with a mortgage will feel the pain immediately.

The Russians are really gonna love Putin now.
Hey Snowden, you really know how to pick countries, don't you? Hope your ass freezes, I hear its gonna get rough out there.

4   anotheraccount   2014 Dec 15, 11:03am  

Straw Man says

Don't forget that they don't have fixed-rate mortgages there, so everyone with a mortgage will feel the pain immediately.

Most people don't have a mortgage in Russia. Russia has 84% home ownership rate and 15% flat tax; practically a Republican paradise The interest rates only have to stay at these levels for a few months to bring the ruble back under 55. With economic pain hitting Europe, I doubt Europe will extend sanctions in march, and ruble will go back to 45.

5   lostand confused   2014 Dec 15, 11:12am  

Well, they have a current account surplus of about 35 billion bucks. They had a current account surplus of about 30 billion bucks last year.

they manufacture gas/oil in rubles- but sell in dollars/euro. Just think of that profit margin. If the ruble stays this low-their domestic industry can start picking up and be competitive. it is not like they are a nation of 300# welfare slobs who scream about the 1%.

6   Strategist   2014 Dec 15, 11:24am  

lostand confused says

they manufacture gas/oil in rubles- but sell in dollars/euro. Just think of that profit margin. If the ruble stays this low-their domestic industry can start picking up and be competitive. it is not like they are a nation of 300# welfare slobs who scream about the 1%.

Competitive in what? They don't make anything the world wants except for vodka, and they drink most of it.

tr6 says

Russia has 84% home ownership

Possible, but they shove multiple families into one tiny apartment. Good luck having sex with a half dozen 5 year olds watching you.

7   lostand confused   2014 Dec 15, 11:27am  

Strategist says

Competitive in what? They don't make anything the world wants except for vodka, and they drink most of it.

If the ruble stays low-they can make anything they want and it will be competitive.

8   Strategist   2014 Dec 15, 11:37am  

lostand confused says

Strategist says

Competitive in what? They don't make anything the world wants except for vodka, and they drink most of it.

If the ruble stays low-they can make anything they want and it will be competitive.

It's not possible. When a currency crashes like that, you have high interest rates and inflation. It nullifies the temporary advantage of a currency drop. What do you think they can make? Cars...big screens....computers? It will take years and years even if they had what it takes.
Putin will be on his knees in no time, apologizing for his foolish mistakes.

9   anotheraccount   2014 Dec 15, 11:49am  

Strategist says

Competitive in what?

#2 Defense exporter in the world after US.

10   Strategist   2014 Dec 15, 11:56am  

tr6 says

Strategist says

Competitive in what?

#2 Defense exporter in the world after US.

I agree. Not something to be proud of, and weapons that are priced in dollars anyway.
Russia has the potential to be an economic superpower, but only by adapting what worked for the West. Capitalism, democracy, co-operation. Anything else is insanity proven over and over again.

11   RWSGFY   2014 Dec 15, 12:17pm  

tr6 says

Strategist says

Competitive in what?

#2 Defense exporter in the world after US.

At least 60% of these capabilities were tied to Ukrainian suppliers which are now lost for Russians and actively working on re-arming their own military. Expect collapse in many articles of Russian weapon exports. It has already started with helicopters. More to come.

12   RWSGFY   2014 Dec 15, 12:27pm  

tr6 says

Most people don't have a mortgage in Russia.

Not true anymore. The quoted 84% ownership is not "free and clear". Last decade has seen an explosion of housing prices and mortgage activity. Not many people can afford to buy a flat outright, especially in major cities like Moscow, St.Petersburg or even Novosibirsk. It's true that Russians prefer buying to renting (even when rent-to-own ratio is completely out of whack), but that doesn't mean they don't borrow to do so.

BTW, the main reason their active duty military personnel is agreeing to go on illegal "vacations" in Ukraine is because they are mortgaged to their eyeballs and would lose their flats if kicked out of the army. In such event not only will they lose their salary, their army-sponsored mortgage will be revoked immediately too.

13   SJ   2014 Dec 16, 1:55am  

Looks like it will be cheaper now to buy vodka and escorts in Russia!

14   Strategist   2014 Dec 16, 2:04am  

HEY YOU says

Wish I had a wheelbarrow full of Fed Res notes that are worth nothing.

My dear Comrade, the worthless Fed Res notes now buys even more Rubles.
You guys can pray for America to collapse all you want, but God aint listening.

15   RWSGFY   2014 Dec 17, 1:38am  

lostand confused says

Strategist says

Competitive in what? They don't make anything the world wants except for vodka, and they drink most of it.

If the ruble stays low-they can make anything they want and it will be competitive.

All they make is crap.

16   Strategist   2014 Dec 17, 1:42am  

Straw Man says

lostand confused says

Strategist says

Competitive in what? They don't make anything the world wants except for vodka, and they drink most of it.

If the ruble stays low-they can make anything they want and it will be competitive.

All they make is crap.

Even the 99 cent store carries nothing made in Russia. Not even pencils.

17   MisdemeanorRebel   2014 Dec 17, 10:09am  

"We have only to kick in the door and the whole rotten structure will come crashing down."

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