From rubble to rouble.. WTF?

link Raisedseam Joined: Apr 22, 2021
Posts: 678
5/14/22, 8:55:32 PM 
link text a financial 360

[quote]– In the days after the Ukraine war began, the rouble’s collapse was a potent symbol of Russia’s newfound financial isolation.

International sanctions sank it to a record low of 121.5 roubles per US dollar,

Things looked dire enough that US President Joe Biden said the rouble had been reduced to “rubble.”

Now, though, it sure hasn’t. The rouble has surged all the way back to where it was closing at 79.7 in Moscow on Wednesday

What’s become clear is that despite an incredibly wide-ranging package of sanctions on the Russian government and its oligarchs, and an exodus of foreign businesses, the actions are largely toothless if foreigners keep guzzling Russian oil and natural gas – supporting the rouble

Bloomberg Economics expects the country will earn nearly US$321 billion (S$436 billion) from energy exports this year, up more than a third from 2021.</div>

link XDFIX Joined: Mar 1, 2003
Posts: 14099
5/14/22, 10:27:50 PM 
In reply to Raisedseam

When you have a commodity where demand is greater than supply you're on top of your game! It's tantamount to not touching a country that carries a nuclear weapon as part of its arsenal!

link Raisedseam Joined: Apr 22, 2021
Posts: 678
5/15/22, 9:06:28 PM 
In reply to XDFIX

See your point. Any economists on mb capable of explaining this insane turnaround how does a sanctioned country prosper so wildly

link Commie Joined: Nov 12, 2002
Posts: 37417
5/16/22, 11:34:29 AM 
In reply to Raisedseam

You dont have to be an economist.

Many EU countries have accepted the Russian proposal for nat-gas payments with dual accounts in the same bank. Many others have announced they will also comply with such Rubles payment demand just as well.

There is a game being played between what is said in public and what countries have to do to literally not collapse.

Nat-gas contracts are not valid, entered into, and in force until the payment transaction is not completed. Two accounts in the same RUSSIAN bank.
Step 1 = deposit euros or dollars, thus complying with the EU sanction…
Step 2 = Russian bank converts euros or dollars into Rubles.

And until Step 2 is satisfactorily completed the payment has not been made and the contract is not yet valid.

So Russia has inverted the terms. If you want nat-gas pay us only with Rubles — or physical gold (!!) — but not euros or dollars as the EU could rob them yet again. So euros or dollars are just temporary credit as only Rubles matter and the transaction is not contractually completed until Russia gets its Rubles.

Ergo...the Ruble has become very relevant for all contracts.

As for when full shutoff happens and IF they want to sell to Europe.

1) Russia fills an oiltanker ship with oil.
2) Wiithout leaving port the oil is sold to an intermediary.
3) The intermediary may then sell the oil on to yet a second intermediary.
4) This intermediary then delivers and sell the oil to Europe.

The Europeans will be paying higher prices for their oil of course due to the intermediaries, but they can delude themselves that they are not buying Russian oil.

And this is how the world works. Really.

You cannot replicate the delivery methods of oil and natural gas, via pipeline, with infrastructure that has not yet been built. And you cant replace oil / nat gas with renewable energy especially for industry / manufacturing. The closest is nuclear energy but many EU countries like Germany have decommissioned most of their nuclear plants.

In essence banning Russian oil is impossible and if scarcity is created, they will make more revenue, supplying less (which is what is happening).

There are a couple of other problems for the EU’s future. China imports a little under 12 million barrels of oil every day. Russia exports a little under 8 million barrels of oil a day. The math isn’t hard to do here.

If Russia implements Glaznev’s and others economic reforms to spur their economy, a portion of that 8 million barrel a day export would start being used at home in Russia. China as Russia ally, knowing that if Russia was to fall to the West that they would be next to be attacked would easily be able to buy most or all of the rest. Then there is exports to other non-Western controlled nations. If Russia starts selling to North Korea for example, that would bolster NK, and NK have large reserves of gold (6th largest in the world), which they would easily pay in.

This whole situation is a headache. IMHO The West went too far in their sanctions and inadvertently have literally made Russia determined to fully decouple from the West. The real repercussions havent started. By next winter in Europe, and by next year with inflation and people getting poorer and angrier, some governments will be under pressure to move on from this conflict.

link camos Joined: May 5, 2003
Posts: 54352
5/16/22, 2:11:27 PM 
at the same time the major European currencies have all had major declines!

link sgtdjones Joined: Feb 15, 2017
Posts: 28556
5/16/22, 2:37:58 PM 
Paper recover for ruble.

A few weeks ago, the Russian currency was tanking under pressure from international sanctions, but the ruble is back. At least on paper, its value has recovered. This lets Russia avert a currency crisis and limits domestic inflation. It means Russia can more easily pay its debts, theoretically. At one point, a ruble was worth a fraction of an American penny. Now, it’s worth a little more than a whole one.
“The ruble is nearly back to where it was pre-crisis,” said Elina Ribakova, the deputy chief economist at the Institute of International Finance. Part of what’s holding up the ruble is demand for it.

“Russia exports mostly commodities. The biggest share of them is oil and gas, and Russia continues to export them,” Ribakova said.Russia has manufactured additional demand by requiring Russian companies to convert most of their profits from abroad into rubles. It’s also made it very difficult for anyone with rubles in Russia to sell them.

With anything that can be bought and sold, if you prop up demand and smother supply, the value goes up.
“It’s almost like the ruble has synthetically returned,” said Simon Harvey, head of foreign exchange analysis for Monex Europe and Canada.
There may be, technically, a price for the ruble, but the market is barely functioning. Basically, just because the store puts up an ad in the window doesn’t mean there’s much inside, Harvey said.Russia can keep its currency propped up for as long as it exports oil and gas and continues to trap its rubles inside Russia.

This doesn’t mean that sanctions, which were imposed by Western nations after Russia’s invasion of Ukraine, have no effect, according to Friedrich Heinemann, an economist at the think tank ZEW.

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link sgtdjones Joined: Feb 15, 2017
Posts: 28556
5/16/22, 2:48:26 PM 
Another viewpoint.

Analysis: Russia's ruble rebound is not quite what it seems

Six weeks after Russia sent troops into Ukraine, the ruble has staged an apparently extraordinary recovery, but all is not what it seems and the exchange rate used in everyday transactions is sometimes very different from the official one."Our economy appears to be resilient to Western sanctions, the ruble is firming visibly," a state TV presenter said on Friday.The ruble rallied past 72 to the dollar on Friday , its strongest level so far this year, heading away from a record low of 121.52 it hit on March 10. Analysts polled by Reuters in late March expected the ruble to trade at 97.50 to the greenback in 12 months' time.At the same time, demand for FX was artificially suppressed. Russia banned cash purchases of dollars and euros, introduced a 12% commission on buying foreign currency online, and set the maximum amount that an individual could withdraw from their bank account at $10,000 until Sept. 9.

And the rouble's buying power has been sharply eroded as companies hike prices for goods, especially ones produced outside Russia whose future supply is in doubt due to the sanctions."I used to buy cans of Dutch-made baby formula for 2,500 roubles before Feb. 24," said Marina, a Moscow resident, with her newborn baby. "Now the same can costs 4,500 roubles while boxes of kasha (a porridge-based drink for children) have gone up to 100 from 64 roubles for a 500-ml box."Since Feb. 24, food prices have soared, taking the year-to-date increase in prices for cabbage and carrots to 85% and 54%, respectively, according to statistics service Rosstat.

Nobel-prize winning economist Paul Krugman has said the ruble has become a crucial target for Russia to defend, "not so much because it's all important but because it's so clearly visible"."So defending the ruble, never mind the real economy, makes sense as a propaganda strategy," Krugman said in an op-ed in the New York Times early this month.Kremlin spokesperson Dmitry Peskov has shrugged off Western allegations that the firming ruble does not reflect the actual economic situation.Despite remarkable ruble gains on the Moscow Exchange, banks are offering to sell dollars and euros at different rates. On Friday, the largest lender Sberbank was selling dollars and euros online for 79.8 and 85.1 rubles, respectively, compared to an official rate of 76.25 and 83.29.

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link terminator Joined: Nov 12, 2002
Posts: 30744
5/21/22, 12:54:07 PM 
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In reply to Raisedseam

Simple the Ruble is now backed by the natural resources of the country including Gold. The US dollar is backed by nothing

link Chrissy Joined: Nov 13, 2002
Posts: 174183
5/21/22, 2:10:34 PM 
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In reply to terminator

See my COmmie you were right post

link johndom90 Joined: Apr 6, 2005
Posts: 6390
5/21/22, 7:40:59 PM 
In reply to terminator

The dollar is solely backed by the projection of military might which facilitates the circle/ cycle of money creation out of thin air most of which goes to we all know where

They got 40 billion approved in a snap.most all of which goes into the accounts of weapons manufactures and there minions.
If the american public ask for increased medicare/ medicaid benefits the first question asked by congresd is... How will it be financed? The budget is in deficit etc etc.

Not so for guns bombs and endless war sad

link Khaga Joined: Mar 28, 2016
Posts: 11807
5/21/22, 9:44:00 PM 
In reply to terminator

That simple! US Dollar is backed by bluster..

link Raisedseam Joined: Apr 22, 2021
Posts: 678
5/21/22, 10:08:28 PM 
In reply to Chrissy

Is evacuation a synonym for surrender

link terminator Joined: Nov 12, 2002
Posts: 30744
5/23/22, 6:57:43 PM 
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In reply to Chrissy

link it cant find it.

link terminator Joined: Nov 12, 2002
Posts: 30744
5/23/22, 7:04:10 PM 
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In reply to johndom90

The United States is drawing its last breath as a power in the world and with that last breath goes the dominance of the dollar. With the Russian invasion of Ukraine, its the last roll of the dice for the elites in the US and Europe. They all know Russia will win in the Ukraine. So, everyone desperately wants to devise new conditions, because the fear is that Russia will not stop. So, they want to devise peace now, and send Russia back to Russia. We are in a world-changing moment, and Russia will not stop but take her full part in this world-changing moment, preferably peacefully, but if not, militarily.

Even US defense secretary Lloyd Austin called the Russian defense minister begging for a ceasefire and got dismissed.

link sgtdjones Joined: Feb 15, 2017
Posts: 28556
5/23/22, 11:01:36 PM 
In reply to terminator

Putin's mindset matches that of Trump. And like Trump, he surrounds himself with sycophants. It might be that China's leaders are cautious and pragmatic and don't want to antagonize the West, while Russia's current leader has lately shown to be choleric and unstable, blaming the West for all of Russia's failures.Under great pressure to keep bowing to incredible political and social pressure, even at risk of physical danger to himself and family, Bondarev chose the road of no return because he simply could not keep walking with Russia on the road to barbarism and destruction.Mr.Bondarev said that Mr. Putin’s war was about staying in power, a stagnating economy and public discontent, and a lack of ideas to stabilize the masses."

Russia is a perpetual disaster in the making, since the bloody days of Ivan the Terrible and even before.A real shame, since it's such a beautiful country.I was recently told by a Russian acquaintance that the problem in Russia was a lack of critical thinking..they were slaves to the Orthodox church and the monarchy,then Communism discouraged thinking for one's self and questioned the party line.It's ironic that the USA has taken the opposite path but arrived at the same point..a complete lack of critical thinking instilled in the population.

An apt description of Putin's government and the government the GOP wants to install.A Government is full of incompetence, thievery, lies and narcissistic theocrats. Sort of confirms that Putin is surrounded by a bunch of yes-men.Odd to think that someone trained as an intelligence specialist has bad intelligence.The most chilling of sentences,” Putin thinks that if you hit some village in America with a nuclear strike, then the Americans will immediately get scared and run to beg for mercy on their knees.” President Biden’s forceful statement for the defense of both Ukraine and Taiwan is very smart and necessary to let both Russia and China know that we will not be scared and run, unlike the cowardly draft dodger/bunker dweller we previously had in the White House.

There are 17 or so US nuclear submarines hiding in the oceans around the world.Each submarine holds over two hundred nuclear weapons.Just one alone can destroy all of Russia.What fools in Russia think that the US would coward if their weapons hit some little village here.

Putin take note: fear that all you would do is awaken a sleeping giant filled with a terrible resolve.Any nuclear exchange would result in the mutually assured destruction.I sincerely hope our top military leaders have talked with Russian military and made it clear that a nuclear attack would leave Moscow a smoldering radioactive cinder.

link carl0002 Joined: Apr 15, 2003
Posts: 24985
5/23/22, 11:15:10 PM 
In reply to terminator
We are in a world-changing moment, and Russia will not stop but take her full part in this world-changing moment, preferably peacefully, but if not, militarily.

Dat is some serious high grade cool aid you drinking there boss. Not even Commie taking a sip from that mug.

big grin big grin

link sgtdjones Joined: Feb 15, 2017
Posts: 28556
5/23/22, 11:50:54 PM 
In reply to carl0002

Termie is breathing too much of that Sahara dust in Trinidad.

lol lol lol

link Casper Joined: Nov 8, 2018
Posts: 6801
5/24/22, 1:30:59 AM 
When it comes to Russia, Casper is ALL Pro-AMERICA. No ifs. no bloody Buts.

To Hell with Putin's Russia.

link terminator Joined: Nov 12, 2002
Posts: 30744
5/24/22, 9:59:20 PM 
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In reply to sgtdjones

No concept of History , Russia has been around for thousands of years have survived multiple invasions over time. Russia has staying power, all this foolish prediction about Russia's demise is evidence of the foolishness of the Americans and the Europeans. The sanctions on Russia proves this , who is the sanctions hurting the most? Not Russia, Russia is self sufficient in food and everything else. They have every single natural resources within its large Territory. The Ruble is now tied to the resources of the country including its vast reserves of gold.

The US dollar is tied to nothing, thin air. The sanctions are painfully hurting the Western Nations more than Russia, the problem is the mainstream media and the political elite refuses to acknowledge this. But ask the man on the street nah. The Fed is in panic mode, no amount of manipulation will save the dollar or the country from inflation. Inflation will continue to rise. By the End of this year Economic Ame

But the story in the main stream media is Ukraine is winning the war, Ukraine winning the war but city after city continues to fall to Russia which the mainstream media is not reporting.........

Counting all the cities with a population 100,000 the Russians have captured so far:

Mariupol — 600K

Kherson — 300K

Melitopol — 150K

Berdyansk — 100K

Nikolayev (500K)

Odessa (1M)

Krivoy Rog (600K)

Zaporozyhe (700K)

Dnipro (1M)

Poltava (300K)

Kharkov (1.5M)

and lets not forget the biggest prize the strategic port city of Mariupol. For 82 days America poured all the weapons they could throw into the Mariupol theatre of operations and Ukraine and the West still got their collective asses kicked and handsomely lost.


link conman Joined: Oct 11, 2011
Posts: 3142
5/25/22, 9:36:33 AM 
lol lol lol

i love when this mb talks about shyte that nobody understand

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