Way out for Russia

[Young Master Smeet]

http://www.bbc.co.uk/news/business-30492518

Quote:

Russia's rouble went into free-fall in Tuesday trading, falling repeatedly to record lows, despite the central bank's dramatic decision to raise interest rates from 10.5% to 17%.

The rate rise was meant to strengthen the currency.

It helped the rouble to 58 to the dollar early on Tuesday, but the dollar now buys as many as 77 roubles.

This is largely a consequence of low fuel prices and the sanctions post-Crimea.  Whether Russia has any otehr response (including military) is unclear, but this isn't good news by a long shot.

[alanjjohnstone]

I think you once said you liked facts to be shown in pictures, YMS. I think the Independent has obliged you.http://www.independent.co.uk/news/business/news/6-charts-that-explain-why-russias-economy-is-in-freefall–and-what-it-means-for-you-9928016.htmlThen the conspiracy theory

Quote:

Here’s what’s happening: Washington has persuaded the Saudis to flood the market with oil to push down prices, decimate Russia’s economy, and reduce Moscow’s resistance to further NATO encirclement and the spreading of US military bases across Central Asia. The US-Saudi scheme has slashed oil prices by nearly a half since they hit their peak in June. The sharp decline in prices has burst the bubble in high-yield debt which has increased the turbulence in the credit markets while pushing global equities into a tailspin. Even so, the roiled markets and spreading contagion have not deterred Washington from pursuing its reckless plan, a plan which uses Riyadh’s stooge-regime to prosecute Washington’s global resource war.

 http://www.counterpunch.org/2014/12/16/the-oil-coup/And the counter conspiracy –

Quote:

HUDSON: The ruble has indeed taken a dive. But this has not affected the Russian economy very much, because the Russian economy operates on rubles, not on dollars. Putin over the last two years has moved to make the ruble independent of the dollar, just as China and other countries are making their currencies independent of the dollar. So the effect now is that, yes,Russia has fewer dollars, but it doesn’t need dollars because it’s re-denominated its foreign trade in rubles, it’s re-denominated them in Chinese yen. So the Russia-China trade, the Russia-Turkey trade, the trade of all of these non-dollar countries is taking place without dollars. So there’s really no need, particularly, for dollars at all. The effect of the ruble falling is to increase the price of imports to Russia. And so Russia’s response has been, okay, if we have to pay more for our food, then we’re going to subsidize our own growing of food. And Russian farm output has been rising very rapidly to replace the imports that it was making from Lithuania, from France, and from other European countries. Putin was also saying, now we’re going to begin to subsidize our manufacturing. We cannot depend upon the Germans, the French, or the Europeans for their manufacturing. We’re going to depend on China, on Turkey, and most of all on our own manufacturing. And the sanctions against Russia have actually proved to be a godsend, because it enables Russia to do essentially what it would have liked to do but couldn’t do under international law: to subsidize and protect its own industry.

This from here http://www.informationclearinghouse.info/article40476.htmMaybe the anti-GM posturing of Russia is explained by this concentration on domestic produce.I really haven't the skill or knowledge to make a judgement about the economics of it all but isn't perhaps the real reason of this is simply the anarchy of the market and unintended consequences of it and not the sinister undertones being given by many. Could we perhaps argue it is a normal disequilibrium of capitalism? I,as i say, await better informed than myself to analyse so i will be checking this thread regularly

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