What happened to the Ruble?

What happened to the Ruble?
I visit Exxon every Tuesday to fill my tank with gasoline. Since I use a credit card, I never notice the price until I am exiting the gas station. I just paid $2.49 per gallon. A few months ago, I was paying nearly $4.00 per gallon. I just read that the low oil prices have affected the Russian Ruble.
I will not feel sorry for Putin! He chose to invade Georgia and he did not suffer. Recently, he invaded the Ukraine with impunity. I wondered would he ever get his comeuppance.
Finally! I hope oil slips to $33.00 per barrel. Take that you brute!
Now, I hope the price of diamonds plummet, too!

 

This is being done intentionally by the Saudis to mess with their twin rivals, the Russians and the Iranians. How long they plan on doing this remains to be seen though. Tangentially, I see the Russians are having a tizzy over the latest round of sanctions.

 

I wonder if they are also planning on buying up rival oil fields in other companies as they feel the pressure.

 

Russia's woes may have been exacerbated by the plummeting of oil prices but it's Putin's actions which have got the country where they are now. Were it not for the sanctions imposed against the country, they wouldn't have been hit that hard by the drop in oil prices since other oil-producing countries economies haven't been affected that much so far.

 

It's somewhat tied to the oil prices, but the Ruble has plenty of room to slide around without hurting Russia too much. Russia has been in some trouble for awhile now, mostly due to its own actions. Oil prices dropping too much lower can only hurt Russia even more deeply. A strengthening dollar also hurts the country because Russia is a huge importer of goods from the US, so that just costs Russia more in the long-term.

 

Seeing how the ruble has dropped in value 50% in the past few days, and that many retailers are no longer selling anything in Russia as a result I would say that the Russian people are definitely taking a hit. Somehow the people of Russia still love the man though. Maybe not so much after the price of everyday goods cost an exorbitant amount though.

 

The biggest winner in all of this is China, because they are able to buy Russian oil dirt cheap. I am not a tin-foil hat type of person, but you have to think the US and Europe has made some deal with Saudi(OPEC) to keep production high in order to crush Russia.

The irony is that I have a friend from Russia, and she said that in order to rent apartments and stuff like that, the landlords are requiring payments in US dollars.

 

I think that no one really gets what Putin is making to the Russian economy and how will Russia survive the billions economic sanctions that the international community has on them, what are they preparing?

 

Putin is a spy, not an economist. My guess is that he thought he could take Crimea and that Europe would not do anything because they are so dependent on Russian oil and gas. But I believe the USA negotiated some type of deal with OPEC in order to make the price of oil drop drastically, which allows Europe to impose sanctions on Russia and still get energy at a fair price.

The drop in oil is a huge problem for Russia because 50% of the Russian gov´ts income come directly from oil and gas. Russia did their five year budget based on oil being at $100/barrel. If oil is 40% below that, it means Russia is at a 20% deficit. This is an even bigger problem because the sanctions make it difficult for Russia to sell bonds to raise money. Russia cannot do any type of debt offering. This has trapped them into a bad position.. they will have huge deficits and will not be able to borrow money to pay for anything. These two things together are why the Ruble has fallen so sharply, because the only way for Russia to pay internal debts is to devalue their own currency. And this is a spiraling sinkhole because the more they devalue the Ruble, the less likely they are to be able to do a public debt offering.

The only option Russia has is to drastically cut spending (by 20%). But gov´t spending is a big part of the economy in Russia, so if they stop spending money, it will trickle down to everyone and the economy will shrink drastically.

Putin miscalculated, he never thought Europe would go along with the sanctions and he never thought the Saudis would allow oil to get this cheap. The USA is doing to Russia exactly what they did to Argentina and Venezuela..... and to a lesser extent what Reagan did to the USSR back in the early 1990s. You cripple the economy and let the country collapse upon itself.