Russian invasion of Ukraine

[grunge]

German media claim Biden can't spend remaining USD 6.5 bn for Ukraine as US stocks are already thin and for problems in logistics, whatever that means.
Shite.

Count they Give the money so Ukraine can buy from other countries.

 

[gordondaviesmoustache]

The bank of Russia has now closed the market for the rouble with its value at 110 to the US Dollar, that is the rouble is worth less than a cent.
The US has sanctioned Gazprom bank and the flow of foreign currency into it has now dried up. They were able to sell gas to Europe as a concession to land locked countries who found it hard to buy bottled gas. That exception has now gone.
The rouble will be suspended from trades until the year end. That will stop it crashing further having lost about 30% of its value in the last three months. In buying much needed technology Russia will use its stock of foreign currency but it cannot do this for ever. Russia still gets Chinese yuan, Indian rupees and UAE dirhams from its oil sales to those countries but not enough to support the economy. Gazprom bank has been a good source of economic data for the west and that data will now dry up.
Tough times for Russians lie ahead.

We need to keep our foot on their throat.

 

[Blue Mist]

Question: several posters have commented on the perilous state of the rouble.
How close do you think we are to a total collapse of the currency?
I assume it would cause havoc and therefore effect the invasion, supplying troops with food etc.
By implication it seems this may end the war rather than by military means, or am I being thick ?

 

[Scottyboi]

Question: several posters have commented on the perilous state of the rouble.
How close do you think we are to a total collapse of the currency?
I assume it would cause havoc and therefore effect the invasion, supplying troops with food etc.
By implication it seems this may end the war rather than by military means, or am I being thick ?

TROUBLE AHEAD
Posted on November 28, 2024 by The Analyst
Yesterday after a frenetic day of ski slope angled declines in value, the Russian Government ordered all trading in the country’s currency suspended as it breached the 110R to $1 USD. That’s a 30% collapse in value since August 30th.

What does it mean?

It’s a pretty bleak outlook. Firstly it means the country ran out of currency to buy up roubles and support their value. The faster the devaluation, (10% in two days) the more currency it would have taken and they just don’t have it.

A fall of 10% in any currency value in the space of 48 hours would have had any central bank governor panicked to the point of volunteering to jump out of hospital window in Moscow rather than wait to be pushed. The scale of this cannot be underestimated. Its a very big problem.

Suspending trading is the last resort. It literally means there was nothing else left to do, the usual method of raising interest rates to attract buyers back to the currency would have fallen on dry ground, because the core of the rouble’s problem is nobody wants it.

The strength of your national currency is a direct signal that those you trade with have confidence in it, that they want to trade in it and will buy it to trade with using their own.

Russian roubles aren’t even wanted by China or India, Russia’s biggest trading partners. neither of them buy anything other than commodities from Russia and they won’t pay in roubles. They flatly refuse. India pays in a complex Emirati dirham and Rupee mix – which Russia hates as it has no use for Rupees. China will only take Yuan and pay in Yuan. With neither of its biggest oil traders buying roubles to pay in, its value has plunged.

INFLATION WILL SKYROCKET

One of the reasons we know inflation in Russia is way higher than the fake government figure of around 9%, is that the currency has devalued by 30%. That means everything imported into Russia from finished oil products to clothing and food, is costing it 30% more and there’s no way that’s not being passed on to customers.

A frozen value of the rouble might prevent what was inevitable and already starting to happen – a run on the banks as people grabbed their cash out of their accounts before it became worthless, so they could rapidly spend it before it meant nothing.

However a frozen value isn’t going to restore any confidence in the currency. everyone knows that as soon as the rouble trades again it will dive in value, so I doubt it will ever be allowed to trade again, not until the war is over at the earliest, and even then maybe not that fast.

BUT IT MAKES EXPORTS CHEAPER AND MORE DESIRABLE?

What exports? Name anything that Russia is exporting anywhere that’s not a commodity? What finished industrial goods or products is Russia selling that anyone would buy where this would make a difference even if they were 30% cheaper?

THE DOLLAR REIGNS SUPREME

The worst part of this for Russia is that what it does export, grain, oil and gas, is priced in USD. It’s often only traded in USD, maybe Euros, and a small amount in Yuan. In essence 90% of world trade is in those currencies – 83% in USD. So the oil especially, is only traded and measured in USD, meaning its not having any benefit for Russia because its not able to gain anything in roubles. The price is rated in USD, converted to currencies like the Yuan and paid to Russia in Yuan. You can’t use Yuan to buy roubles through Chinese banks. Even Russian companies trading with China have to trade with Yuan. The Russian central bank forces them to exchange Yuan for Roubles and repatriate the money to Russia – but they normally spend it before they waste it doing so in the time frame they’re given.

Ultimately this is the biggest and most serious red alert Russia has faced on the economy. It’s a fundamental problem, currency is the life blood of any economy and this is beyond a transfusion. There’s no simple way to put this right. Only ending the war, restoring trade, ending sanctions, regaining confidence in the rouble, will ever make a difference. And we’re nowhere near seeing that happen.

The Kremlin has a deep, fundamental economic crisis on its hands and there’s no getting away from it.

 

[Keeper!]

We need to keep our foot on their throat.

We need to destroy them, at least the powers that control the people.

There are a lot of very decent people in the Russian population who hate Putin and Co but the fear of getting locked up or even killed stops them speaking out.

We should be doing everything possible to unstabilize Putin.

 

[CTID1977]

From Kyiv in 3 days to:

**** said that russia would not allow Kyiv to receive nuclear weapons. I see, they marked a new red line. So, American missiles will continue to fly in the Russian Federation and further, and Putin once again demonstrated to the West that he is a squeaky ****.

@Yigal_levin

 

[cleavers]

The bank of Russia has now closed the market for the rouble with its value at 110 to the US Dollar, that is the rouble is worth less than a cent.

As someone who doesn't follow these things much, do you know what the value was pre-covid ?

 

[gordondaviesmoustache]

There’s no simple way to put this right. Only ending the war, restoring trade, ending sanctions, regaining confidence in the rouble, will ever make a difference. And we’re nowhere near seeing that happen.

I don’t expect, given the source, the author intended to conflate the ending of the war with an end (or even a meaningful reduction) to sanctions, but it’s hugely important this narrative doesn’t take hold if Russia gets to keep a single square inch of what it has stolen since 2022 (since 2014 might be a bit of a stretch).

 

[SPIDERBOY]

Russians delerious this evening.
I have one eye on Kerch Bridge.
Hopefully.

Slava Ukraine.

 

[gordondaviesmoustache]

Russians delerious this evening.
I have one eye on Kerch Bridge.
Hopefully.

Slava Ukraine.

Delirious, how? That could mean lots of things!