Moscow warns against panic as ruble plunges to historic lows

[Bosonic]

Source: AFP

Moscow (AFP) - Russian authorities told people not to panic on Tuesday as the battered ruble plunged to record lows, floored by tensions with the West over Ukraine, new sanctions and falling oil prices.

The national currency fell to 38.82 rubles per dollar after weakening on Monday to below 38 against the dollar for the first time.

It also broke through the symbolic level of 50 rubles per euro for the first time in several months.

The ruble has slumped as investors fret about the impact of ever more stringent Western sanctions on the economy, which is already teetering on the verge of recession.

Read more: http://news.yahoo.com/ruble-plunges-sharply-agains

[TwilightGardener]

1. What inspires more panic than when public officials call for not panicking?

Seems counterproductive to even say the word.

[ChairmanAgnostic]

3. Let me count the ways

A. Claiming that ISIS is preparing attacks on our mainland.

Oh, wait. Texan moronic sheriffs already do that.

B. Claiming that marijuana causes white women to sleep with black men.

Oh, wait. That was the key "expert testimony" in the 1930s which led to ban pot.

C. Claiming that liberals will demand christians to practice sodomy.

Oh, wait. Christian pastors and priests already demand that.

[LiberalEsto]

2. Aaaaaw, what a pity. Could it be the result of sanctions?

[karynnj]

4. How could that be the RT crew has said they have no effect at all?

Seriously, I worry about what Putin will do. Some of his reactions (speaking of going after Lithuanians who avoid the Soviet draft in the early 1990s for instance) have been pretty unbalanced.

I hope that the people of Eastern Ukraine take the offer given them - which gives them a lot of autonomy, but not the degree Russia wants for them -- while Russia givse NO autonomy to any goups wanting it is Russia.

[uhnope]

6. yes, it's not a time for schaudenfreude. Putin is most likely insane and this increases the danger

for the vulnerable people in Russia, especially gays, independent journalists, whistle blowers, dissidents...

[Igel]

55. Elections have consequences.

Short-term Russia is likely to get what the population as a whole deserves.

That they're too willing to blame others to admit it increases the risk for everybody around the edges. There are far more of them, with a far greater level of blame, than the groups you mention in Russia.

[freshwest]

50. The 'no effect' at all comes from three memes:

#1: Obama should have never been in the White House. All his solutions, therefore, are bad.

#2: Christian Dominionist triumphalism is faith one will win, no matter what.

#3: Khrushchev is still alive and going to bury the USA again. Because it is led by Satan.

Since the chief American support for Putin is the far right in religion, politics, alternative media, Faux Noise and Palin, if they just say it enough, it'll be TheTruth©.

Putin's disrespecting that border with Lithuania to nab Russian draft dodgers is a blow against the fabled 'autonomy' being supported. Much less 'national sovereignty.'

Hope that those you know will be all right in that area, Amanda.

[Igel]

56. And yet not one of those reasons is in the least applicable to RT.

Or to anything outside of a straitened slice of purely, narrowly domestic US politics.

[Brigid]

5. Must. Resist. Posting. Obvious. Animal. House. Clip.

Oh, forget it.

[Kelvin Mace]

7. Anyone panicking will be shot

and then sent to Siberia.

[PosterChild]

10. For the very best in medical care available! (nt)

[Brigid]

44. I see what you did here.

But that is not far off the mark. When the Germans invaded Russia in WWII, Stalin's order to the Russian Army was "Not one step back." Bet you can guess what happened to those who dared disobey.

[Kelvin Mace]

46. Yep.

Hitler and Stalin seemed to be in competition for craziest MoFo in the world.

[Tarheel_Dem]

8. RT & Putin's "Internet Troll Army" say different. Everything's just peachy keen, doncha know?

[newthinking]

18. That is bigotry there. the way you posted it. Want to do the same for another demographic around

here? If it were not a ethnic slur against Russians and was something else you would lose your account in a moment. You must be very proud that you can display bigotry without recourse due to our cold war prejudice being stirred up. Think about it....

[Tarheel_Dem]

31. You think about it. I don't wanna. Let's ask Fearless Leader, Boris & Natasha what they think.

[Major Hogwash]

33. If Boris was in Moscow today, he would look at Putin and say . . .

. . . "This is a great catastrophe, is it yours?"

[Tarheel_Dem]

34. !!!

[Brigid]

40. And we have our thread winner.

[Elmergantry]

22. LOL! NT

[freshwest]

36. Aww! That's just sad. Reminds me of this American demographic:

[davidpdx]

38. I think it is hilarious that someone threatens you about your account being suspended

Based on a post that wasn't even a reply to that individual. If said individual wanted your account suspended he or she would have bothered to alert your post. Since the person hasn't it pretty much proves what they are full of.

[Tarheel_Dem]

47. Agreed.

[NCjack]

9. Hmmm. Anything we can do to drive it down faster? nt

[Xolodno]

11. Putin is smiling.

....The ruble tanking does this:

1. Makes Russian goods cheaper....and easier to export.
1.a Due to high demand, increases employment....ending a possible recession.

2. Europe wont be able to take advantage of cheaper goods.
2.a Good chance of cheaper goods flowing into Europe under the black market.

3. Increases demand on domestic production.
3.a Industries in Russia that were "borderline" now become fully profitable.

4. Increases Russian trade ties outside of Europe.
4.a Russia traded heavily with Europe due to the fact it was the most economically feasible. These sanctions make, a bitter pill to swallow at first....more feasible to increase trade relations outside of Europe.
4.b With outside trade relations more solid, initial costs of investment to trade outside of Europe become null. The EU will not be able to take advantage of this once relations are normalized.

5. Who hurts the worst? The EU. Russia's retaliatory measures will benefit those outside of the EU. Granted Russia's return on investment will not be as high if it was trading with the EU, but everyone outside will benefit...and Russia will benefit with new trade partners.

6. The losers? Russian Oligarchs won't be able to buy that new yacht this year.
6.a The EU...in higher costs of goods imported or goods that rely on imported Russian goods.
6.b The USA, were spending political capital we cannot afford thanks to GWB. The EU is going along for now, but this may be a turning point. Former countries under the Soviet thumb are gung ho.....the others....not so much.
6.c Sanctions. Sanctions don't work...its been long known that they don't work....See Cuba, North Korea. Iran, Libya under Quadaffi, etc. for examples.

7. Winners? Anyone who buys Rubles at rock bottom prices.

[ballyhoo]

13. That was a good one. I figure the same.

[newthinking]

19. oh

all the giddiness expressed here. Such a progressive lot we have eh?
Jokes on them though, knowing little about Russian society. I would much rather be poor in Russia than in the states. If / When our economy melts down it will be much more severe. That is not bias speaking, that is reality.

Very few Russians have mortgages. The majority own their homes outright. That is just a fact.

[ballyhoo]

24. Yes, it's very strange. I figured what you just wrote

was true about Russia. Yes, here in the US the collapse will be horrible. I can just see it. I've had my house paid for many years, but I know many who haven't paid theirs. That is the way it is done in the US. On another matter, what do you think of the US going to Syria on the pretense of bombing ISIS, but really going to bomb Syria. I got in a short discussion with Papango today and I am still not sure whether we both had the same opinion and I just started arguing too fast. I am really upset about this going into Syria. I don't have much use for Assad, but there is still the law, which Obama seems to skirt whenever he can. I am so tired of war. There has been wars going on since I was a kid, and I am now 68. Stupid, stupid, stupid.

[newthinking]

25. I am not as well versed on Syria.

In fact I am actually pretty new to understanding how heavily controlled the narrative on these things is. It was a shock with Ukriane and the reason is because I really do know the region well. Imagine my surprise as I had always known the media was biased, but I was still naive about how it worked in the modern age. I didn't know how much reporting and the way stories are distributed had changed, and how because the pipeline is in series, that it can be manipulated at the point of origin by a good pr campaign. Despite having the appearance of some competition.

[Amonester]

26. There have been wars going on since before the beginning of...

First: The illustrated History (cavemen).

Second: The written History to this day. Never completely halted for just one day everywhere on this rather small planet. Maybe wars are a whole part of this nuisance of a species of ours, and that the only way there will not be any war going on anywhere might occur once Mother Nature will anihilate us all using its ongoing climate-change mode, and start over (again...) with another dominant species (in the hopes there will be universal peace) someday.

But working for peace should not stop, though.

[Cayenne]

29. Pride before the fall.

Putin is ending the petro dollar monopoly, the consequences we have yet to feel.

[Xolodno]

49. Thanks...

...I looked at some of the other replies and thought "wow! the propaganda runs strong". Greek Tragedy's reply actually made the case stronger that sanctions wouldn't hurt without realizing it. Another blew up and talked about $5 Bread...sure the initial shock is going to hurt, but the strong national sentiment will probably over ride it. And its a temporary price shock...eventually other nations not part of the sanctions will fill the void. Goods will still be higher priced than before, but it will be more manageable than currently. No one is thinking long term...only short term which appeals to their prejudices.

I guess everyone wants a perceived victory...even if its absolute BS...and lets face it...it does appear we are being set up for a "manufactured victory". Sanctions have never toppled a nation...and in many cases, made the populace rally against the nation (mostly US) implementing them. And when we add the fact Russia has not followed through with their "no commercial airline fly over" threat...I have to wonder if a number of nations involved in the sanctions, are ignoring them.

At the end of the day...and this will be unpopular here....Putin has won.

1. He secured Crimea.

2. He got Eastern Ukraine to be semi-autonomous and made sure Ukraine will not join NATO

3. He'll probably get the Crimea annexation vis a vis recognized in an energy deal.

4. He forced the USA to expend political capital (something it doesn't have a lot of right now thanks to GWB)..that will probably cost it later....then...maybe it already has. Perhaps that's why we are getting involved with eliminating ISIS.

5. And this will piss a lot off here...Putin will remain in power. The sanctions will eventually fade and be ignored (as there is too much money involved for Europe)...and since the USA did not get what it wanted...this will fade from the US conscious and memory.

Think I'm going to just bail out of DU for awhile...the war propaganda seems to have just infected too many. Some are just outright ignoring logic (some making the outlandish claim that Estonia is about to invaded)...some actually defending the IMF...others actually advocating war with Russia...and even a few getting right to the border of genocide by implying Russians should be exterminated. Hate has clouded the minds of too many here, I'll start posting again when the war drums stop.

[Igel]

57. There was an outlandish claim that the Ukraine was about to be invaded.

And we've seen time and time again that if you reward people who do bad things you get more of the bad behavior. It's usually enough just not to punish them to see the behavior continue.

The West has rewarded Putin. And many people seem to be in luv with imperialism ... as long as they got theirs and the imperialism doesn't affect them or their $.


Putin's made sure that Russians are hated by a lot of people. And, in the end, while he likes being hated--it's like a victim who insists on doing things to further victimization--it's not going to end well. Either they lose, and suffer; or they win, and others suffer.

Many rather liked that in the '50s and the '60s and the '70s. Even in the '80s I had people in my class convinced that what we did to Latin America was far, far worse than what Stalin did. Partition of Poland? Annexation of the Baltics? Genocide? Deportations? Looting of Germany? Cold War? Proxy battles that killed 10s of thousands? None of it happened. Or it only happened because somebody dared resist the forces of Good and Light--Stalin, Khrushchev, Brezhnev, Andropov, Chernenko (... some of these were blips).

[tabasco]

16. Maybe Putin is smiling,

but people paying $5 for a loaf of bread aren't too happy.

Something you forgot to mention --- falling ruble makes ALL goods more expensive for Russians.

In fact, you forgot a lot in your glowing praise of Putin's brilliance. LOL.

http://www.businessweek.com/news/2014-05-05/ruble-plunge-hitting-russian-shoppers-speeds-slide-to-recession

[newthinking]

21. That is such bs. I still have relatives there. A loaf of bread ~60 cents. Fuck propaganda

and most Russians own their homes (very few mortgages there). They won't buy that new TV or go on vacation, but they don't need to have a lot of income when food is pretty much the only concern (medical paid, utilities have programs and also you can be years late on utility payments in a bad economy and they won't shut you off (like here).

Just saying. That is not propaganda, that is the reality, which is far more complex and nuanced than our media presents it.

[geek tragedy]

20. oy

1. Nobody buys Russian-made goods outside of Russia. They don't export cars, or electronics, or appliances, or machine tools, or clothing, or wrist watches, etc etc. Russia exports stuff from the ground. It doesn't make anything worthwhile. Declining ruble doesn't make their oil or gas any cheaper.
1a. See (1)

2. Europe exports to Russia, not the other way around. Europeans have no interest in Russian-made goods.
2a. See (1) and (2)

3. Null, see above.
3a. Russia doesn't have even marginal industries. It has some industries that satisfy local demand for cheap stuff, but it's not an export-led manufacturing economy.

Here is a hint: when the ruble is losing value against the dollar and the Euro, that means this is hurting Russia worse than those other countries.

Sanctions do work at crippling economies. See, Cuba, North Korea, Iran.

And now Russia.

[newthinking]

27. Sanctions are not crippling Cuba and Iran is higher than india in HDR

Just saying.
IMO the only thing sanctions (in most, not all cases) is affect materialism. It depends mostly on how the government and people react. But it does not seem to usually lead to crippling unless there is also a war involved.

Read this from the Human Development Report...


http://hdr.undp.org/sites/all/themes/hdr_theme/country-notes/CUB.pdf

and this for Iran

http://hdr.undp.org/sites/all/themes/hdr_theme/country-notes/IRN.pdf

[GOLGO 13]

37. Wait, what? Other than oil/gas and an insane amount of Vodka...

a metric ton of cheap AK-47, RPG's and other small weapons, Russia is not known for exporting anything. For big ticket war items they have to go to places like France for warships.

Obama & the EU are putting a Brooklyn beat down on Russia.

[Orsino]

39. The ruble failing hurts Russia badly.

Attempts to spin it as good for Putin, or for Russia, are kind of silly.

This is very different from US sanctions on Cuba. This is how the world rebukes Russia. I only wonder if Putin can save face.

[quadrature]

12. where is Obama on this?

he could be asking his friends to
dump the Ruble.

[roamer65]

14. Collapsing the currency of a nuclear armed state is a bad thing, people.

It's what large wars are made of...like world wars.

First you have currency wars, then trade wars, then world war.

[Cayenne]

30. I can't believe people are cheering this

Putin has gone back to building nukes again. People here are unconcerned.

[Igel]

58. No.

Because the source of all evil are Americans and Europeans. It's Pavlovian conditioning. It's always been true and will always be true. It's risen to the status of belief.

[Turbineguy]

15. Remain calm, all is well....

[newthinking]

17. Russians have been through far worse before.

Sanctions will end up hurting the common westerner more than anything as they cause the Europe's economy more pain and with it unemployment.

Russia still has an extremely high rate of their population who awn their homes outright. That means while a downturn means less material goods, most families don't have to worry about rent. Also, in those countries they still have generous allowances towards late utility payments especially during downturns.

Here is a link to the 90s when at some points there were thousands of Rubles to a dollar.

http://www2.gwu.edu/~slavic/golosa/ruble.htm

[Nye Bevan]

23. What to do, RT? Deny, deny, deny, and claim that everything is just peachy,

or blame President Obama, NATO, and the evil West in general for conspiring to devastate Russia's economy?

Decisions, decisions......

[newthinking]

28. or just accept that things are more complex than we understand and the media promotes?

It is not RT, it is liberal intellectual thought processes.

Certainly nobody here can predict the future. But it is very easy to blow holes in mass media induced factoids.

And I have yet to see anyone blame the war in Ukraine on Obama. So far he has been more reasonable than the cons, neocons and NATO voices.

[snooper2]

42. so are you part of the Russian Kracken?

RELEASE THE KRACKEN!

[OilemFirchen]

43. "And I have yet to see anyone blame the war in Ukraine on Obama."

Read more, write less.

Just a suggestion.

[Tarheel_Dem]

32. TYT/Buzzfeed: "Russia's Online Troll Army Is Huge, Hilarious & Already Everywhere "

"Moscow is financing legions of pro-Russia Internet commenters. But how much do they matter?"

"Russia's campaign to shape international opinion around its invasion of Ukraine has extended to recruiting and training a new cadre of online trolls that have been deployed to spread the Kremlin's message on the comments section of top American websites.

The sad part is they've begun to believe their own propaganda.

[karynnj]

51. The ruble falling will hurt these trolls -- as they argue that it doesn't nt

Trolls anywhere are usually obvious - even when in their native countries. It is hard to imagine that they succeed on opinion boards in countries where they completely do not know the culture. (Not to mention there are even micro cultures - differing from the country as a whole on specific message boards. ) They are really much more obvious than they think they are.

[Tarheel_Dem]

53. Yeah, but could you imagine such an organized US effort inside Russia? God Bless America!

It sometimes amazes me how much the US is trashed here, and any love of country is met with rebukes of "nationalism", but the same folks can boast about Putin's 80%-90% approval rating, in a damn near closed society, where state run media tells Russians what to think, and REAL journalists turn up dead on the regular. I can't fathom that.

[karynnj]

54. I would think it completely unlikely and a very silly idea

Just as I am aware that there are Americans who studied Russian - like the Russians who studied English, that does not translate to really knowing the culture. Not to mention, are there internet comments on the Russian language parts of Russian websites?

[freshwest]

35. Wait! That can't be true. What will happen to the Putin/Palin ticket in 2016?

[snooper2]

41. HA HA HA that is what you get Putin you fucking asshole

Lets see if your propaganda keeps the public on your side or if they will start to see you for the dick you are-

[OilemFirchen]

45. They laughed when I sat down at the keyboard...

http://www.democraticunderground.com/10024679277#post8

By the end of the year, a wheelbarrow of rubles will buy two loaves of bread.

[Tarheel_Dem]

48. "By the end of the year, a wheelbarrow of rubles will buy two loaves of bread."

[Igel]

59. See! Serious deflationary pressure on the ruble.

As prices fall precipitiously.

[freshwest]

61. Whoa! That thread, honestly speaking, sounds like a good thing for Crimeans. Well, some of them.

Are you saying the ruble is being downgraded from:

Obama's sanctions?

Oil prices going down since the West is moving to alternative energy, led by Obama?

Or because Putin is taking better care of pensioners and public workers?

IMO, the last two factors are very good solutions, although from different sides in the propaganda wars.

The first factor is proof it's better to sanction than drop bombs.

Would like to hear your view on my perception, if you don't mind, please.

[OilemFirchen]

62. The falling ruble is a direct result of sanctions.

There are other factors applying pressure on the ruble, but the freefall is directly a result of U.S. and European sanctions.

Despite the balderdash upthread, a collapsing ruble is only beneficial to those buying their exports, which, as has been noted, are extremely limited - and those who are short the ruble. Russian citizens are obviously harmed by a dramatic decrease in their buying power. My comment on the other thread was in direct response to the questionable Crimean plebiscite to join Russia. In theory, doubling pensions and raising salaries improves the lot of Crimeans, should they join Russia, but not if their buying power is halved.

That said, the comment was snark - aimed at the Putinistas who, in other threads, were claiming that the ruble was practically bulletproof. Sadly, though, Ukraine's hryvnia is suffering a fate similar to the ruble. Both are at record lows, so everybody in this conflagration is harmed.. The hryvnia, BTW, has been falling because of panic, induced by a constant stream of news of invasion.

I'm still betting that the hryvnia ultimately outperforms the ruble, which, by some estimates, is destined to fall to 44.40 against the dollar-euro basket - a trigger point at which the Russian government intervenes. And there may well be more sanctions, driving the ruble farther down. By contrast, the hryvnia should stabilize unless Putin becomes even more aggressive.

[KinMd]

52. I wonder if the big money guys in Russia would plan an exit strategy for Vlad

[ladjf]

60. Good job Mr. Putin. nt