Go to main pageCommunityForumsBusinessShould Russia be defending the Rouble or should the government simply recognise changed economic circumstances and let it slide?
Should Russia be defending the Rouble or should the government simply recognise changed economic circumstances and let it slide?
Alex 24 January, 2009, 03:59
What the world needs to do is to go back to sound money and forget all the fiat fantasy paper money. A world currency of gold and silver I agree but not a wolrd currency produced by a damn central banker that will control us all!
Gold and silver will limit everyone's armies greatly since they wont be able to be supported due to the shortage of the commodities. Gold and silver will be the end for all central bankers. Those countries that dont have gold or silver could back their currencies with other limited universally valuable commodities.
Actually its like this -
The Ruble rises when Commodity prices rise...
The Commodity prices rise as & when World Economy improves and thus more demand for commodities is there...
There as and when World Economic condition improves Ruble goes up again
Therefore those who are optimistic will buy Rubles, pessimists will sell...
Its as simple as that!
My money is on Mr. Putin.
I am not am economist and most probably not qualified to comment. The Americans and British cause trouble and then demand that the rest of the world must help them out of trouble. Iraq, Afganistan and now the world financial crisis. Let them stew in their hypocrosy.
I say, dump the dollar and the British Pound. The Rouble should be the primary currency with China and South America following. Limit the freedom of Americans,British and their NGO's in Russia. If one looks at world leaders, United Nations, World Bank and the WTO,they are all weaklings bowing to the American filth and who once again cause trouble wherever they go, it is easy to see that Mr. Putin is the only true leader. A very cleaver man.
I believe that Russia will eventually be in control and solve this problem on his terms.
Michael,
Do not be naive. Mr. Putin has no control over the price of oil, which is essentially the only Russian money-maker. As goes the price of oil...so goes Russia.
Putin is helpless...in fact he appears to be trying to close the doors on foreign import and subsidize export. That is called desperation.
I have shorted the Ruble and RSX all the way down and made a lot of money. I will now begin buying again in a very small, measured manner. I have to believe Russia is close to a bottmo. I just hope it doesn't fall off the edge like in the past.
In the meanwhile, I would get into the dollar and euro if I was an everyday Russian. There is reason to be scared.
I would like to clarify that I am an American, but I am not against any people (although there are many governments of nations that are questionable to say the least). I wish well for the everyday Russian people.
My fear is that a desperate Putin can be erratic...and oil will be nowhere near where it was for quite some time. It will head back up by the end of the year, but oil producing nations can pretty much forget about anything over $100/barrell for some time.
Invest in Roubles now that the price of oil is just $35.
In three years the price of OIL will reach over $100 again as oil output is near its peak according to de Margerie, chief executive of Total (Financial Times, Feb. 15 2009)
So in the midterm price of oil is going up and that means price of the Rouble will go up too.
If we add the infraestructure investmen being undertaken in the Russian Federation (Sochi, Vladivostok, high speed train) and the low level of debt of the Russian economy (Public Debt is just 6% of GDP compared to over 170% in Japan and over 60% in the U.S.) then there is room for growth.
Not less important is the fact that the Russian economy is the only one profiting from Global Warming as millions of hectares of land are becoming arable.
It is my personal belief that the current trade price in crude is nothing more than an attempt to exacerbate the economic downturn in countries such as Russia. I would read very much between the lines of the very good speech Mr.Putin made at DAVOS in which he stated his position quite clearly, and more importantly he said what most already know. The US dollars day as the world reserve currency is over, anyone considering buying dollars at this stage would be crazy.
I'll make a further assertion, the recent visit by Hilary Clinton to China shows without doubt that the dollar is in serious trouble. It is now wholly reliant on China continuing to buy treasury paper.
If for example Russia backed it's rouble with gold, have you considered the effect this would have on fiat currencies?
Buy Roubles! Oil and gas prices will come back and when they do they will stay high for decades. Pretty soon Prime Minister Putin will have to worry about the Rouble becoming too strong. Mr. Putin and his advisors know this. Don't worry. Good times are on the way for Russia. -- REG CROWDER, Freelance Financial and Investment Writer (Europe)
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