Note to Russia’s dictator Vladimir Putin…your days
are numbered and soon the Citizens of Russia will demand that you step down…one
way or the other.
A few months ago, you got a small taste of what to
expect in the near future when tens of thousands of Russian Citizens flooded
the streets of at least three major Russian cities demanding that you explain
why their sons are coming home in body bags from the Ukraine and Crimea after
you lied to them that Russian troops aren’t engaged in the conflict.
Even the “Mothers of Russia”, who do the best they can to count the number
of dead to bring transparency and truth to the nation, when the Russian authorities try to hide the facts; sometimes
threatening the families of the dead to stay quiet.
Meanwhile, more lethal aid is pouring into the
Ukraine. Tatars from around the region
living in other countries are joining their fellow brothers in the Ukraine by
the thousands, aided (trained and funded) by the Government of Turkey and other
nations in the region; as Turkey promised several Tartar Tribes months ago
after Putin militarily forced the annexation of the Crimea.
Very soon, as the economic conditions in Russia further
degrade and long lines for bread and meat form once again and reminding the folks
of their standard of living when suffering under the yolk of communism, the
people will flood the streets yet again in angry protest. (Do you remember what the Russian mobs did to the statues of Stalin and Lenin? Or the Russian tanks firing on the Kremlin? Because of you and your insanity Vladimir, the Citizens of Russia will once again have to suffer the pain of internal revolution)
Then, as more young Russian soldiers come home dead,
and the people can’t find or afford food……..then you will be forced from power
and hopefully will be replaced by a leader who truly wants the Country of
Russia to join the democratic countries of the west to fully enjoy their
prosperity; no longer willing to silently appease the insanity of another Russian Tyrant.
So, It is time for you to go, Vladimir. And how you go is up to you….you might want
to remember how the late Romanian leader Nicolae Ceausecu and his wife were
eventually removed from power. FYI, Mr.
Putin, you might be pleased to know that the Citizens of Romania are doing just fine these days.
Ronald L. Kirkish
By Matt O'Brien December
15 at 6:30 PM
A funny thing happened
on the way to Vladimir Putin running strategic laps around the West. Russia's
economy imploded.
The latest news is that
Russia's central bank raised interest rates from 10.5 to 17 percent at an emergency 1 a.m. meeting in
an attempt to stop the ruble, which is down 50 percent on the year against the
dollar, from falling any further. It's a desperate move to save Russia's
currency that comes at the cost of sacrificing Russia's economy.
But even that wasn't
enough. After a brief rally, the ruble resumed its cliff-diving ways on
Tuesday, falling another 14 percent to a low of 80 rubles per dollar. It
was 60 rubles per dollar just the day before. The problem is simple. Oil is
still falling, and ordinary Russians don't want to hold their money in rubles
even if they get paid 17 percent interest to do so. In other words, there's a
well-justified panic. So now Russia is left with the double whammy of a
collapsing currency and exorbitant interest rates. Checkmate.
It's a classic kind of
emerging markets crisis. It's only a small simplification, you see, to say that
Russia doesn't so much have an economy as it has an oil exporting business that
subsidizes everything else. That's why the combination of more supply from the
United States, and less demand from Europe, China, and Japan has hit them
particularly hard. Cheaper oil means Russian companies have fewer dollars to
turn into rubles, which is just another way of saying that there's less demand
for rubles—so its price is falling. It hasn't helped, of course, that sanctions
over Russia's incursion into Ukraine have already left Russia short on
dollars.
Add it all up, and the
ruble has fallen something like 22 percent against the dollar the past month,
with 11 percent of that coming on Monday alone. As you can see below,
the Russian ruble has fallen even further than the Ukrainian hryvnia or Brent
oil has this year. The only asset, and I use that word lightly, that's done worse than the ruble's 50 percent fall is Bitcoin, which is
a fake currency that techno-utopians insist is the future we don't know we
want.
Source: Bloomberg
And this is only going
to get worse. Russia, you see, is stuck in an economic catch-22. Its economy
needs lower interest rates to push up growth, but its companies need higher
interest rates to push up the ruble and make all the dollars they borrowed not
worth so much. So, to use a technical term, they're screwed no matter what they
do. If they had kept interest rates low, then the ruble would have continued to
disintegrate, inflation would have spiked, and big corporations would have defaulted—but at least growth
wouldn't have fallen quite so much.
Instead, Russia has
opted for the financial shock-and-awe of raising rates from 10.5 to 17 percent
in one fell swoop. Rates that high will send Russia's moribund economy into a
deep recession—its central bank already estimates its economy will contract 4.5 to 4.7 percent if oil stays at $60-a-barrel—but they
haven't been enough to stop the ruble's free fall. Russia might have to resort
to capital controls to prop up the value of the ruble now, and might even have
to ask the IMF for a bailout, too.
Putin's Russia, like
the USSR before it, is only as strong as the price of oil. In the 1970s, we
made the mistake of thinking that the USSR's invasion of Afghanistan meant we
were losing the Cold War, when the reality was that they had stumbled into
their own Vietnam and could only afford to feed their people as long as oil
stayed sky-high. The USSR's economic mirage, though, became apparent to
everybody—none less than their own people, who had to scrounge in empty
supermarkets—after oil prices bottomed out in the 1980s. That history is
repeating itself now, just without the Marxism-Leninism. Putin could afford to
invade Georgia and Ukraine when oil prices were comfortably in the triple
digits, but not when they're half that. Russia can't afford anything then.
Putin might be playing
chess while we play checkers, but only if we lend him the money for the set.
As the ruble plunges to
new historic lows, ordinary Russians seem unfazed by the free falling currency
saying everything will be good in the end. (Reuters)
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