Merged Ukraine erupts in riots and general strike.

[McHrozni]

One wonders if Putin is taking notes on what North Korea apparenty did to SONY studios for possible future reference if somebody makes a film where Putin's Russia is the bad guy.

When that happens, this really isn't a question any more.

Putin has maintained sky-high ratings over the years solely due to a high oil price. It'll be interesting to see how he rides out the oil glut. He controls the media and the courts, so he can maintain himself in power for a long while ... at the expense of his country, of course.

The Ukrainian quagmire may be an important catalyst. If enough recruits refuse to serve as illegal combatants and take up arms against the regime, the said regime could be destabilized very quickly.

McHrozni

 

[timhau]

Putin has maintained sky-high ratings over the years solely due to a high oil price.

... and the fact that he gets to do the ratings.

 

[McHrozni]

... and the fact that he gets to do the ratings.

Mm, yeah, that was important too. Control of media in general helped to shape the public opinion. Still, as the low oil price begins to bite, things will likely get problematic.

This is probably part of the military "modernization" programme. It's to ensure he has a loyal force of armed thugs to fall upon when **** hits the fan.

McHrozni

 

[Puppycow]

Interesting new strategy to preserve the value of the ruble:

Interest Rate Raised to 17% in Russia

Russia’s government is in the middle of an all-out fight to preserve the value of the ruble in the face of plummeting oil prices and Western sanctions over the Ukraine crisis. In the boldest move yet to stanch the bleeding, the Central Bank of Russia announced a stunning interest rate increase in the middle of the night.

Its main deposit rate is now 17 percent, up from 10.5 percent when Russian banks closed for business on Monday. The rate increase, one of the largest ever announced by the central bank, echoes the drastic measures taken during the 1998 crisis when Russia defaulted on its debt and devalued the ruble.

The question is whether the move — announced on the central bank’s website at 1 a.m. in Russia — will appease the markets. If it doesn’t, investors may view the rate increase as a sign of increasing disarray.

Some economists are concerned that Russia is now stuck in the quagmire of stagflation, or high inflation and low growth. The government expects inflation of 10 percent or more by the end of this year and for the country to fall into a recession next year.

I might start a thread about this over in economics. Will it work?

If "stagflation" is the problem, this move appears to be similar to the one used by Paul Volcker in the 1980s to curb inflation in the United States. It did work, although it also caused a recession, but one that didn't have long-lasting after-effects.

http://en.wikipedia.org/wiki/Paul_Volcker

The Federal Reserve board led by Volcker is widely credited with ending the United States' stagflation crisis of the 1970s. Inflation, which peaked at 13.5% in 1981, was lowered to 3.2% by 1983.[14]

The Federal Reserve board led by Volcker raised the federal funds rate, which had averaged 11.2% in 1979, to a peak of 20% in June 1981. The prime rate rose to 21.5% in 1981 as well. Thus, the unemployment rate became up over 10%. The economy was restored since the tight-money policy was over in 1982. According to William Silber [15] "His policy of preemptive restraint during the economic upturn after 1983 increased real interest rates and pushed Congress and the president to adopt a plan [the 1985 Gramm-Rudman-Hollings bill] to balance the budget. The combination of sound monetary and fiscal integrity sustained the goal of price stability."
. . .
Volcker's Federal Reserve board elicited the strongest political attacks and most widespread protests in the history of the Federal Reserve (unlike any protests experienced since 1922), due to the effects of the high interest rates on the construction and farming sectors, culminating in indebted farmers driving their tractors onto C Street NW in Washington, D.C. and blockading the Eccles Building.[18]

Any debtors with adjustable interest rate loans are not going to like paying 17% interest, but it could attract investors looking for high yields if they think the premium is worth the risk.

 

[Rincewind]

When I read about this stuff, I do wonder how Tom Clancy could have been so wrong...

 

[Puppycow]

Will it work?

Seems we may already have the answer to my question.

Rather than reassure investors it seems to have spooked them:

A part of the article I linked in my post above but didn't quote said:

The ruble plummeted yet again on Monday, by more than 10 percent, to about 64 per dollar. The ruble has lost nearly half its value since the start of 2014.

And now I see this over on Bloomberg:
Ruble Sinks to 80 a Dollar Defying Surprise Russia Rate Increase

The ruble plunged to 80 a dollar for the first time as investors speculated Russia will announce capital controls after the largest interest-rate increase in 16 years failed to revive confidence in the currency.

The ruble sank as much as 19 percent to 80.10, before trading at 78 at 3:14 p.m. in Moscow. That was the biggest drop since 1998, the year Russia defaulted on its local debt. The currency erased a gain of 11 percent as investors shrugged off a surprise Bank of Russia decision to take its key interest rate to 17 percent from 10.5 percent. Ten-year government-bond yields jumped 317 basis points to a record 16.4 percent.

Russian central bank Governor Elvira Nabiullina may resort to capital controls as she runs out of options to revive a currency wrecked by the oil-price slump and international sanctions, money managers from Schroder Investment Management Ltd. to Skandinaviska Enskilda Banken AB said. The ruble has plummeted 58 percent this year even after an 11.5 percentage-point increase in rates and interventions exceeding $80 billion.

“I am speechless,” Jean-David Haddad, an emerging-market strategist at OTCex Group in Paris, said in a message. “What a failure for the central bank. Russia would need to announce capital controls today. That is the last solution.”

So, it seems to have gone from 64 rubles to the dollar to 78 in a day (Tuesday, after falling 10% on Monday), which is down 58% from the beginning of the year. The move clearly seems to have backfired.

 

[McHrozni]

Seems we may already have the answer to my question.

Rather than reassure investors it seems to have spooked them:

A part of the article I linked in my post above but didn't quote said:


And now I see this over on Bloomberg:
Ruble Sinks to 80 a Dollar Defying Surprise Russia Rate Increase

So, it seems to have gone from 64 rubles to the dollar to 78 in a day (Tuesday, after falling 10% on Monday), which is down 58% from the beginning of the year. The move clearly seems to have backfired.

It came back to 71 per dollar, but still - the move was an abject failure. I would compare it to amputating the wrong leg.

McHrozni

 

[jimbob]

Interesting new strategy to preserve the value of the ruble:

Interest Rate Raised to 17% in Russia



I might start a thread about this over in economics. Will it work?

If "stagflation" is the problem, this move appears to be similar to the one used by Paul Volcker in the 1980s to curb inflation in the United States. It did work, although it also caused a recession, but one that didn't have long-lasting after-effects.

http://en.wikipedia.org/wiki/Paul_Volcker



Any debtors with adjustable interest rate loans are not going to like paying 17% interest, but it could attract investors looking for high yields if they think the premium is worth the risk.

There is already a related thread about Russia selling off its gold reserves

http://www.internationalskeptics.com/forums/showthread.php?t=286308

 

[dudalb]

Seems we may already have the answer to my question.

Rather than reassure investors it seems to have spooked them:

A part of the article I linked in my post above but didn't quote said:


And now I see this over on Bloomberg:
Ruble Sinks to 80 a Dollar Defying Surprise Russia Rate Increase



So, it seems to have gone from 64 rubles to the dollar to 78 in a day (Tuesday, after falling 10% on Monday), which is down 58% from the beginning of the year. The move clearly seems to have backfired.

Pretty clear Western Investors have decided that Russia is not a country they want to put their money into . Simply too unstable and risky.

 

[NoahFence]

Maybe prancing around shirtless and invading sovereign nations wasn't the best course of action after all?

 

[trustbutverify]

The volume of smug comments from "anti-imperialists', congratulating V. Putin and company for once again humiliating Western civilization has decreased significantly.

 

[Klimax]

When I read about this stuff, I do wonder how Tom Clancy could have been so wrong...

What are you referencing?

 

[Rincewind]

What are you referencing?

Tom Clancy (sadly deceased) - author of what have been called "Techno-thrillers" created an alternate reality as the setting for his novels.

In this "Clancy-world", Russia becomes a real, respected democracy, and manages an economic recovery, and defeats an invasion by China with help from the USA.

 

[Klimax]

Tom Clancy (sadly deceased) - author of what have been called "Techno-thrillers" created an alternate reality as the setting for his novels.

In this "Clancy-world", Russia becomes a real, respected democracy, and manages an economic recovery, and defeats an invasion by China with help from the USA.

IIRC "Dragon and Bear" I think.(IMO below average...) Well, back than many were way too optimistic about Russia. (Be it USA or EU)

 

[Rincewind]

IIRC "Dragon and Bear" I think.(IMO below average...) Well, back than many were way too optimistic about Russia. (Be it USA or EU)

Yup - that's the one.

I tend to agree with you - too many stylised characters...

 

[TheRealnz]

I have to cringe at those looking at the supposed collapse of the Russian economy looking on with grins.

I never thought I would see the day as a youngster when I think an ex-KGB man is more trustworthy than the US gov. These are strange times. But Russia hasn't just spent 4 trillion odd in 13 years on invasion and occupation resulting in the deaths of over a million people. Russia isn't killing illiterate farmers with extra-judicial drone strikes to the tune of over 2000 people in tribal Pakistan. Russia doesn't have 800 - 1000 military installations covering the Globe.

Russia doesn't have a military machine with a budget as large as the next 14 nations COMBINED. Russia doesn't have ten carrier strike groups and few inhibitions about using them. In short Russia is not an expanding empire but the US of A is doing all of this and actions one day will kill us all.

 

[trustbutverify]

I have to cringe at those looking at the supposed collapse of the Russian economy looking on with grins.

I have to laugh at those who started celebrating Russian mastery a little to early. Oh well, back to the RT drawing board.

 

[Border Reiver]

In short Russia is not an expanding empire but the US of A is doing all of this and actions one day will kill us all.

And the invasion of Georgia, the military occupation and later absorption of the Crimea, along with the support for the Ukrainian rebels, plus all the shenanigans in the Baltic States and Sweden are all peaceful and not the signs of a militarily adventurous state?

 

[TheRealnz]

And the invasion of Georgia, the military occupation and later absorption of the Crimea, along with the support for the Ukrainian rebels, plus all the shenanigans in the Baltic States and Sweden are all peaceful and not the signs of a militarily adventurous state?

Granted Russia not above using it's military power to affect outcomes in neighboring states in keeping with it's interests. Note however they don't tend to try to affect those outcomes on another continent, or in a foreign nation with no ETHNIC RUSSIANS. You may call that splitting hairs but Putin gets compared to Hitler over Ukraine while Obama gets a free ride in Afghanistan, Iraq and tribal Pakistan and Yemen and plans for Iran and Syria. There is a MASSIVE difference both in the nature of actions and magnitude.

I don't think Putin is a benevolent leader but let me know when he sends the better part of a million troops through a foreign country with a different culture, language and populace and subjects them to 12 years occupation resulting in millions of deaths. Or when he starts drone striking farmers in the middle East.

Do you see the difference or do you really not want to see it? You including others here don't seem to criticize the US government actions but have a lot to say and about Russia.

 

[uke2se]

Granted Russia not above using it's military power to affect outcomes in neighboring states in keeping with it's interests. Note however they don't tend to try to affect those outcomes on another continent, or in a foreign nation with no ETHNIC RUSSIANS.

Not too many ETHNIC RUSSIANS in Sweden. What percentage of ETHNIC RUSSIANS do you think justifies a RUSSIAN INVASION?

You may call that splitting hairs but Putin gets compared to Hitler over Ukraine while Obama gets a free ride in Afghanistan, Iraq and tribal Pakistan and Yemen and plans for Iran and Syria. There is a MASSIVE difference both in the nature of actions and magnitude.

I don't think Putin is a benevolent leader but let me know when he sends the better part of a million troops through a foreign country with a different culture, language and populace and subjects them to 12 years occupation resulting in millions of deaths. Or when he starts drone striking farmers in the middle East.

Do you see the difference or do you really not want to see it? You including others here don't seem to criticize the US government actions but have a lot to say and about Russia.

Obama didn't start any wars in Afghanistan or Iraq (or any of the other countries you mentioned). Bush started wars, and he was justifiably called out for it. He was compared to Hitler, and many people are still demanding his head.

The difference you speak of is that Bush no longer runs the US. Unlike Russia, the US elects their president for limited terms.