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As the Rouble sinks, Russia teeters towards total economic collapse


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2022 Mar 2, 11:55am   1,835 views  32 comments

by Eric Holder   ➕follow (5)   💰tip   ignore  

USD/RUB: The Russian Rouble is now worth less than one US cent. And as governments and corporations impose extreme sanctions, the Russian economy could soon return to 1998.

Karl Marx warns ‘history repeats itself, first as tragedy, second as farce.’ Hitler’s Anschluss with Austria is mirroring Russia’s annexation of Crimea, the encroachment in the Donbas with the occupation of the Sudetenland.

But as Putin assaults Kyiv, Russia is starting to resemble its own ghost of prior economic ruin.
USD/RUB: Russian Rouble collapse

On 31 December 1999, Russian President Boris Yeltsin ceded the Presidency to a 46-year-old Vladimir Putin. Yeltsin had burned through the country’s economy in the first Chechen war, despite reminding the US that ‘Russia has a full arsenal of nuclear weapons. He (Clinton) has forgotten about that.’

However, in 1998 Russia was running out of money. The IMF and World Bank lent it $22.6 billion to support financial reforms, and between October 1997 and August 1998, the Russian Central Bank spent $27 billion trying to shore up the Rouble. But on 17 August 1998, the currency became so devalued that Russia defaulted on its debt, causing economic collapse.

Russia’s Putin officially invaded Ukraine on 24 February; like Chechnya, it’s a region he deems unworthy of statehood. And like his predecessor, he has warned the west that interference could result in ‘consequences you have never seen in history.’

But a Molotov cocktail of Ukrainian defence and Western sanctions could see Russia’s economy (USD/RUB) collapse before its President can declare victory

....

One Russian Rouble is now worth less than one US cent, and less than one Afghani, the currency of a failed state. It’s even worth less than a Robux, a make-believe currency bought with the pocket money of western children.

Steve Hanke at John Hopkins University has calculated Russian inflation is at 69.4%, while Estonian MEP Riho Teras believes the war effort is costing £15 billion every day. And Rabobank analysts predict there could soon be a ‘complete collapse in the Rouble.’

This leaves Russia with a stark choice: Peace, a banking collapse or hyperinflation.

...


https://www.ig.com/en-ch/news-and-trade-ideas/as-the-rouble-sinks--russia-teeters-towards-total-economic-colla-220301?source=patrick.net

Comments 1 - 32 of 32        Search these comments

1   FarmersWon   2022 Mar 2, 12:23pm  

Putin took the bait setup by NATO or He had no choice.
Bottom line is Russians don't like Putin and his days are numbered.

Americans don't like Biden , But globalists are playing shrewd game to give him chance to survive.
Overall ratings of world leaders is negative.
2   Misc   2022 Mar 2, 12:58pm  

So, the Ruble sinks. The Russians will simply buy less imports.

The Ruble is down about 35%.

Oil prices are up about 35%, does that mean the US teeters towards total economic collapse?

Article is a bit hyperbole.
3   Eric Holder   2022 Mar 2, 1:00pm  

Misc says
So, the Ruble sinks. The Russians will simply buy less imports.

The Ruble is down about 35%.

Oil prices are up about 35%, does that mean the US teeters towards total economic collapse?


I don't know. Is the US in danger of defaulting on their debt?
4   Misc   2022 Mar 2, 1:19pm  

Give the war a few more months or years.

The war in Syria lasted ... what 10 years.
5   Ceffer   2022 Mar 2, 1:22pm  

Eric Holder says
I don't know. Is the US in danger of defaulting on their debt?


Rumor is they missed their Feb. payments and are seeking extensions. Thus, their eagerness to start WWIII and get the war mongering 'get out of jail' free card.

DC is bankrupt and is mostly empty. Biden et alia are cutting most of their shit in the Voce of America building in New York.
6   Shaman   2022 Mar 2, 1:24pm  

Eric Holder says
I don't know. Is the US in danger of defaulting on their debt?


Depends on the interest rates. If they go up as high as 8%, then the answer is YES.
7   richwicks   2022 Mar 2, 1:24pm  

Misc says
The war in Syria lasted ... what 10 years.


It's not really ended has it? Our propaganda just quit reporting on it.
8   Eric Holder   2022 Mar 2, 1:31pm  

Shaman says
Eric Holder says
I don't know. Is the US in danger of defaulting on their debt?


Depends on the interest rates. If they go up as high as 8%, then the answer is YES.


So, there is your answer, @Misc.
9   Eric Holder   2022 Mar 2, 1:32pm  

Ceffer says
DC is bankrupt and is mostly empty.


Interesting. Any fancy houses to be had for free?
10   Misc   2022 Mar 2, 1:33pm  

richwicks says
Misc says
The war in Syria lasted ... what 10 years.


It's not really ended has it? Our propaganda just quit reporting on it.


Since Turkey and Syria declared a ceasefire, it's pretty much over except for some malcontents. A few randon incidents blamed pretty much on ISIS.

Less shootings than a weekend in Chicago.
11   Eric Holder   2022 Mar 2, 1:33pm  

Misc says
Give the war a few more months or years.


For what?
12   Eric Holder   2022 Mar 2, 1:33pm  

richwicks says
It's not really ended has it? Our propaganda just quit reporting on it.


It's not? I thought Putler won that one for Assad.
13   Eric Holder   2022 Mar 2, 1:34pm  

Ceffer says

Rumor is they missed their Feb. payments and are seeking extensions.


But do we have PROOF?
14   Misc   2022 Mar 2, 1:37pm  

Eric Holder says
Misc says
Give the war a few more months or years.


For what?


To see the impact of a depreciated Ruble.

Hint --- it is going to have no impact on the war.
15   RC2006   2022 Mar 2, 2:09pm  

Hasn't Russia been hording gold for a while? And now oil is moving past $100.
16   Eric Holder   2022 Mar 2, 2:16pm  

Sanctions significantly increase chance of Russia international debt default, analysts warn

LONDON, March 2 (Reuters) - Sanctions imposed on Russia have significantly increased the chance of the country defaulting on its dollar- and other international market government debt, analysts at JPMorgan and elsewhere warned on Wednesday.

Russia has over $700 million worth of government bond payments due this month. While in theory it has ample reserves to cover debt, in practice a freeze on some assets and other measures could affect its ability to make payments. read more

"The sanctioning of Russian government entities by the United States, counter-measures within Russia to restrict foreign payments, and disruptions of payment chains present high hurdles for Russia to make a bond payment abroad," JPMorgan said in a note to clients.

"Sanctions ... have significantly increased the likelihood of a Russia government hard currency bond default."

The central bank and the finance ministry did not reply to a Reuters request for comment on the possibility of defaults.

The first crunch date, JP Morgan analysts said, is March 16 when two bond coupon payments are due, although like much of Russia's debt these have 30-day "grace periods" built into them, which would push back any formal moment of default to April 15.

Russia has just under $40 billion worth of international market or "hard currency" debt as it is known. While it is a small amount for an economy of Russia's importance, any missed payment will trigger a chain of events.


Major credit rating agencies like S&P Global, Moody's and Fitch, which all had investment grade scores for Russia until last week, would downgrade it en masse.

JPMorgan estimated that some $6 billion worth of Credit Default Swaps (CDS) that bondholders have bought as insurance policies would also need to payout, although the process could be complicated in the case of further debt sanctions.

The default concerns follow a warning from the Institute of International Finance (IIF) this week, which flagged how roughly half of Russia's $640 billion of foreign exchange reserves had effectively been frozen by international sanctions.

Capital Economics also warned on Wednesday of the growing default risks. It said it would primarily hit international investors - foreigners held $20 billion of Russia’s dollar- and rouble-denominated government debt at the end of last year, according to Russia's central bank - though it also would further scar Moscow's reputation in international markets.

"The likelihood that the government and companies are unable or unwilling to make external debt repayments has risen significantly," Jackson said.








https://www.reuters.com/business/finance/sanctions-significantly-increase-chance-russia-international-debt-default-2022-03-02/?source=patrick.net
17   Eric Holder   2022 Mar 2, 3:46pm  

Germans Seize Russian Billionaire Alisher Usmanov’s Mega-Yacht

Russian billionaire Alisher Usmanov was sanctioned by the European Union on Monday. Two days later, Forbes has learned from three sources in the yacht industry that one of his prized possessions—the 512-foot yacht Dilbar, valued at nearly $600 million—has been seized by German authorities in the northern city of Hamburg.






https://www.forbes.com/sites/giacomotognini/2022/03/02/germans-seize-russian-billionaire-alisher-usmanovs-mega-yacht/?sh=388602d652dd&source=patrick.net
18   Eric Holder   2022 Mar 2, 4:00pm  

More CGI:

19   Misc   2022 Mar 2, 4:18pm  

Markets...manipulated...heaven forbid.

Looks like some insiders knew that Norway's Sovereign Wealth Fund along with other "enlightened" holders of Russian stocks would dump them regardless of price because it is the right thing to do.

So much free money, if you are connected.

Sure.........it's a meritocracy with a level playing field.

The fuq?
20   Eric Holder   2022 Mar 2, 4:18pm  

Gazprom, Lukoil and Sberbank are now penny stocks as Russian companies collapse in London

Russian natural-gas giant Gazprom, oil-producer Lukoil and leading bank Sberbank are all penny stocks based on their trading on the London Stock Exchange, as the local market was shut for a third day.

Sberbank SBER, -78.43%, which had assets of over $500 billion at the end of 2021, was trading for 3 cents a share in afternoon action. The European Commission on Wednesday approved the resolution plan for its Croatian and Slovenian arms that will be sold. Its Austrian and Czech operations will be wound down, with depositors compensated up to €100,000.

Lukoil LKOD, -93.23%, Gazprom OGZD, -23.50%, and Rosneft Oil ROSN, -77.71% continued to collapse as the dollar-denominated secondary listings in London remained the one venue where Russia’s top companies could be valued.



21   AmericanKulak   2022 Mar 2, 4:20pm  

I'd be a total buyer of Gazprom if I could hold it not as an ADR.

China's energy needs aren't going down.
22   Misc   2022 Mar 2, 4:31pm  

AmericanKulak says
I'd be a total buyer of Gazprom if I could hold it not as an ADR.

China's energy needs aren't going down.


You know that means you are more willing to trust the Russian government not to steal your investment than the US or British government, right?

... for regular folks, you would probably run afoul of the sanctions if you tried.
23   AmericanKulak   2022 Mar 2, 4:41pm  

Misc says
You know that means you are more willing to trust the Russian government not to steal your investment than the US or British government, right?


No, that's a strawman. I don't trust any government, some more than others. Gazprom been around for decades.

And Damn, Man:

The entire Gold, Silver, Crypto, Ammo Reloading and Yams! businesses are based wholly or partially on not trusting the US or British Government and Central Banks.

My canned goods buys last summer were awesome vis a vis Supermarket prices. I substitute fresh tomatoes with canned tomatoes (12/$10 special last fall) as I rotate them out.

Next up I need some reloading equipment. Which, given ammo prices, will pay for itself very quickly if they stay so high.
24   Misc   2022 Mar 2, 8:19pm  

Russia has over $600 billion of hard currency, I think someone will loan them enough to pay the interest payments on the about $40 billion they have outstanding. They also have about $14 billion of incoming cash per month from their energy sales.

The Ukraine, however, has $129 billion of external debt. That's a lot of exposure for their foreign creditors.

Anyone wanna wade through the BIS filings to see which banks are in trouble?
25   AmericanKulak   2022 Mar 2, 10:37pm  

Misc says

The Ukraine, however, has $129 billion of external debt. That's a lot of exposure for their foreign creditors.

Anyone wanna wade through the BIS filings to see which banks are in trouble?


I expect the successor government to be sued, or if absorbed, an attempt to put it on Russia.

On the other hand, oil is higher than Snoop Dogg and Willie Nelson together, and Russia only has a 20% GDP-to-debt ratio

The US has 120%, and that's federal, not inc. state, private-public partnerships or quasi-state orgs like PATH.
26   Misc   2022 Mar 2, 11:33pm  

Putin ain't gonna keep control of the Ukraine. Then he might feel an obligation to rebuild the cities he's gonna destroy.

Then the successor government can be made to repay the war reparations as a priority over previous claims.

That $129 billion is gone. It's just a matter of making the bank(s) recognize it.
27   AmericanKulak   2022 Mar 2, 11:41pm  

Misc says
Putin ain't gonna keep control of the Ukraine. Then he might feel an obligation to rebuild the cities he's gonna destroy.

Then the successor government can be made to repay the war reparations as a priority over previous claims.

That $129 billion is gone. It's just a matter of making the bank(s) recognize it.


Don't know what the plan is yet. If Ukraine gave in early, I'd say demilitarized and a no-NATO promise, maybe a non-aggression pact.

Now I'm not so sure. I'm fairly sure he'll let the Western third go, no juice worth the insurgency squeeze up there.
28   Misc   2022 Mar 3, 12:18am  

Donbass region as Russian states. Recognition that Crimea is Russian w/ water rights. Lavrov says he has a list of prohibited weapons. no-NATO.

War crime trials against the Nazis. Statement that the Ukraine military placed equipment in residential areas. Some trials for that. Statements that it was Ukraine that caused the noble peacemakers to come.

All sanctions lifted. That might be difficult to arrange. --- Just off the top of my head.
29   RWSGFY   2022 May 26, 6:42am  

Exchange rate is meaningless when you can't exchange anything, duh.
30   richwicks   2022 May 26, 7:08am  

HunterTits says
Misc says
Putin ain't gonna keep control of the Ukraine. Then he might feel an obligation to rebuild the cities he's gonna destroy.


See Grozny, Chechnya.


That's right, see Grozny, Chechnya:

https://goo.gl/maps/Qo6qgLBTRegHTJmA6

Go wander around it.

Looks a lot better than Detroit. In fact, it looks nicer than San Francisco.
31   AmericanKulak   2022 May 26, 7:22am  

RWSGFY says

Exchange rate is meaningless when you can't exchange anything, duh.

China, which manufacturers most of America's shit, is also trading with Russia with no restrictions.

Cutting off Italian Cheese and French Wines means nothing to Ivan Ivanovich.
32   RWSGFY   2022 May 26, 7:32am  

AmericanKulak says

RWSGFY says

Exchange rate is meaningless when you can't exchange anything, duh.

China, which manufacturers most of America's shit, is also trading with Russia with no restrictions.

Cutting off Italian Cheese and French Wines means nothing to Ivan Ivanovich.


Well, good for him. But it kinda begs the question: if switching to 100% Chinesium is so good for Ivanovich, why didn't he do it earlier? Like in that prison joke.

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