Biden said he’d reduce currency to “rubble” – and he was right!

12 Responses to Biden said he’d reduce currency to “rubble” – and he was right!

1. Bruce of Newcastle says:

   21 June, 2022 at 1:21 pm

   Actually the USD has been climbing like someone lit a fire under it lately.
   We’re under 70c. It’s funny that the flight to safety is to the cause of all the instability.
2. Lee says:

   21 June, 2022 at 2:54 pm

   How are those sanctions going?
   LOL
3. Petros says:

   21 June, 2022 at 4:40 pm

   USD has barely changed against the Swiss Franc and AUD over the last five years. Seems the Euro and GBP are doing badly.
4. Prospero says:

   21 June, 2022 at 5:25 pm

   A moment’s Googling would show many recent news stories explaining that the Russian government’s actions has been propping up the Ruble, and they now actually want it to drop. That wouldn’t play into the simplistic formula here, though, would it.

   Similarly, the question:

   How are those sanctions going?

   has been the subject of many news stories (on TV and elsewhere) about how they are seriously hitting the Russian industrial base – things like new cars now being manufactured without air bags or anti lock brakes, for example.

   But apart from the Western media, let’s see what the Moscow Times, says:

   Russian Economy Faces 10 Years of Recession Without Reforms – Sberbank CEO

   The Russian economy will return to 2021 levels in a decade unless the country takes reform measures amid unprecedented Western sanctions over Russia’s war in Ukraine, the head of the country’s largest lender Sberbank said Friday.

   “If nothing is done in the current situation, then… the return of Russia’s economy to the level of 2021 could take about 10 years,” Sberbank CEO Herman Gref said.

   Under its so-called “inertia” scenario, Sberbank forecasts Russia’s GDP to fall by 7% in 2022 and 10.3% in 2023 compared with 2021, when it grew by 4.7% to $1.77 trillion.

   The decline would slide back into the single digits in the following years and reach -0.1% by 2030, according to a slide of Sberbank’s forecast at the St. Petersburg International Economic Forum (SPIEF), Russia’s annual showcase event for investors….

   “External conditions have changed for a long time indeed, if not forever,” Central Bank Governor Elvira Nabiullina said at a SPIEF event Thursday. “It’s obvious to everyone that it won’t be as it was before.”

   Gref said 56% of Russian exports and 51% of imports accounted for countries that have imposed sanctions against the country.

   “This is a threat to 15% of the country’s GDP.”

   The Kremlin has expressed confidence in its determination to ride out Western sanctions.

   If only the commenters would read more than the pap served up here…
5. C.L. says:

   21 June, 2022 at 5:35 pm

   The “Moscow Times” is a Dutch website, presumably financed by the CIA.
6. Prospero says:

   21 June, 2022 at 6:18 pm

   Ho hum. Analysis at Barrons:

   According to the forecasts from major international organizations as well as the Russian government itself, Russian GDP will fall by 8-11% in 2022. This will be the deepest recession in Russia since the early 1990s, worse than the 1998, 2008-09, and 2014-16 crises. The Russian Central Bank predicts that Russian households’ inflation-adjusted incomes will decline by 10%. Some of the impact is being felt already: The mortgage market collapsed by a factor of four, while the sales of new cars declined six-fold.

   How can we reconcile the economic collapse with the appreciation of the ruble? The key to understanding is the unexpected and unprecedented decline in imports. Western governments imposed substantial export controls, but the private sector’s voluntary exodus drove the most important impact. More than a thousand Western companies have exited Russia. Since the West (and, in particular, Europe) accounted for the majority of Russia’s cross-border trade, this resulted in a two-fold decline in imports. Some of the forgone imports are critical for Russia’s ability to invest and grow, others for certain industries’ day-to-day operations. Some can be substituted by Chinese imports but many cannot. Moreover, in many cases large Chinese companies and banks have already demonstrated their unwillingness to circumvent Western sanctions, as doing so may bring a risk of facing secondary sanctions.

   The dramatic decline in imports implies reduced demand for dollars within Russia. If there is nothing to import, why buy dollars? This immediately results in a stronger ruble. Normally, a stronger currency is a sign of a more competitive economy. In the case of Putin’s war-time economy, a strong ruble is a side-effect of the import embargo, which in turn is a major problem for Russian industry.

   Etc.

   Or can I only trust words from the mouth of Putin and his apologists?
7. C.L. says:

   21 June, 2022 at 10:04 pm

   I assign to Putin and his apologists marginally more credibility than I acknowledge in Biden/Boris/Brussels and their apologists.

   Uke pom-pom wavers have stated their aims as regime change, assassination, the end of the Russian Federation, the end of Russia as European energy alpha and the re-taking of the entirety of lost territory. None of these has happened.

   What we hear instead is neo-con loonies talking about Forever War in Ukraine to ‘send a message’ to China re Taiwan. Well, it certainly has sent a message.

   The message is that not a single Western nation will commit hundreds of thousands of young men to fight overseas. That is no longer politically achievable.

   I want to see the Russian Federation survive, succeed and turn away from its Byzantine isolationism – and I want to see the return of the Reagan/Bush Sr-class leaders in the West to encourage that. We need to envisage a new European bloc – founded on a common Judeo-Christian heritage – and united against China.

   Ukraine – a corrupt shit-hole – will have to come to terms with Russia because it is never getting those lost lands back again. If that sounds like ruthless realpolitic, it is – but one far less heartless and reckless than the pseudo-realpolitic of turning Ukraine into a permanent killing field to sate the delusions of the current US State Department.
8. Chris M says:

   21 June, 2022 at 10:32 pm

   have to come to terms with Russia because it is never getting those lost lands back again.

   Confusing, you also said just today annexation was never Russia’s goal. Maybe you see some difference in the term, to me same same (shrug).

   Anyways none of us can know from way over here with propaganda from both sides.

   Like Biden, who could really know what Putin’s real goal is and does he even have a definite one – or more fluid like freewheeling destruction depending upon what army resources he has left. The sooner these crazy boomers autocrats expire and exit the better.
9. C.L. says:

   21 June, 2022 at 11:00 pm

   I meant annexation of the entire country.
   That was never Russia’s goal.

   Neo-cons are claiming they ‘stopped’ something that was never planned.
10. Petros says:

    22 June, 2022 at 5:36 am

    Have a look at the wheat production areas in the Ukraine. Mostly the south-east. Looks like Putin is getting most of that territory and most of the coastline. Why would he want the unproductive western part? Lviv was in an oil producing area back before WWI. Not nowadays.
11. bollux says:

    22 June, 2022 at 9:41 am

    “I assign to Putin and his apologists marginally more credibility than I acknowledge in Biden/Boris/Brussels and their apologists.”
    Hear hear. I don’t believe anyone anymore more without 3 weeks of study. Doctors, Health officials, Politicians, MSM. Used Car salesmen are far more trustworthy than these shonks.
12. JC says:

    23 June, 2022 at 8:21 pm

    Prospero’s Barron’s excerpt is a good part of the reason the Ruble’s appreciated.

    On the capital account side, Russians cannot convert rubles and then move the foreign currency overseas because Russian currency controls prevent it and also because the West has placed restrictions on capital flows from Russia.
    The other reason. The Ruble isn’t convertible and not freely traded. The government can move the exchange rate to whatever level it desires.