Russian Ruble collapse !

SIX PACK

The Russian Ruble is collapsed to a 5 year low. I'm thinking of buying 100k worth. Smart move ?

http://mobile.businessweek.com/articles/2014-12-16/no-caviar-is-not-getting-cheaper-everything-you-need-to-know-about-the-russian-ruble-collapse
I look forward to the responses

euroboom13

SIX PACK wrote: »

The Russian Ruble is collapsed to a 5 year low. I'm thinking of buying 100k worth. Smart move ?

http://mobile.businessweek.com/articles/2014-12-16/no-caviar-is-not-getting-cheaper-everything-you-need-to-know-about-the-russian-ruble-collapse
I look forward to the responses

When rates are at an all time high ,its a bad time to buy that currency IMO.(because it normally signals more devaluation IMO)

SIX PACK

http://www.telegraph.co.uk/finance/economics/11299644/Russian-economic-meltdown-sparks-wave-of-panic-buying-London-homes.html

Surely it can't get any worse than this

euroboom13

I am sure them boys would gladly take your 100k, and fill your wheelbarrows with Rubles.

SIX PACK

€1275.20 is the current exchange rate for 100,000 ruble that's a massive fall.

To give you some example of the scale of the devaluation of the currency I was in Saint Petersburg last year and we exchanged 1000euro and got back roughly 2500 RUB.
What's ****ing everything up for Russia at the moment is the war with Ukraine and the illegal occupation of Crimea. The sanctions imposed by the EU and US are clearly hitting Vladimir Putin where it hurts

David900

Would be interested to know where you're going to buy?
Retail brokers have suspended orders according to reports.

power101

SIX PACK wrote: »

€1275.20 is the current exchange rate for 100,000 ruble that's a massive fall.

To give you some example of the scale of the devaluation of the currency I was in Saint Petersburg last year and we exchanged 1000euro and got back roughly 2500 RUB.
What's ****ing everything up for Russia at the moment is the war with Ukraine and the illegal occupation of Crimea. The sanctions imposed by the EU and US are clearly hitting Vladimir Putin where it hurts

If you only got 2500 ruble you got absolutely robbed. A year ago you should have gotten 44,000 ruble as the exchange rate was 1:44 now its 1:80

conditioned games

SIX PACK wrote: »

€1275.20 is the current exchange rate for 100,000 ruble that's a massive fall.

To give you some example of the scale of the devaluation of the currency I was in Saint Petersburg last year and we exchanged 1000euro and got back roughly 2500 RUB.
What's ****ing everything up for Russia at the moment is the war with Ukraine and the illegal occupation of Crimea. The sanctions imposed by the EU and US are clearly hitting Vladimir Putin where it hurts

What makes you think theres an occupation of Crimea? Last year a euro got 45 roubles and it now gets 80. Are you sure you visted russia.

Whats happening to their currency is no different to what will be happening to all currencies in the world 2 years from now. They too over printed their currency like most countries in the world today and are now experiencing the consequences before the rest.

dasdog

I had a nibble last week and got in/out quickly. Margins were increased today it is so volatile. I doubt anyone knows with any degree of certainty where this is going. It seems very risky at this stage...if it turns it may never be back to the current lows.

euroboom13

Irish women will have to up their game, I see a boom in Russian brides !.... lol.

bobs ur uncle

SIX PACK wrote: »

What's ****ing everything up for Russia at the moment is the war with Ukraine and the illegal occupation of Crimea. The sanctions imposed by the EU and US are clearly hitting Vladimir Putin where it hurts

russia did not illegally occupy crimea and it wasnt an illegal "annexation" like mainstream media would have you believe. it was actually a completely legal secession under international law.

secession is defined as follows:

Secession (derived from the Latin term secessio) is the act of withdrawing from an organization, union, military alliance or especially a political entity
[...]
justification of secession:

Economic enfranchisement of an economically oppressed class that is regionally concentrated within the scope of a larger national territory.

Consent as important democratic principle; will of majority to secede should be recognized

Preserving culture, language, etc. from assimilation or destruction by a larger or more powerful group(they are majority russian!!)

Cultural Secessionism: any group which was previously in a minority has a right to protect and develop its own culture and distinct national identity through seceding into an independent state.
[...]

types of secession:

National (seceding entirely from the national state) versus local (seceding from one entity of the national state into another entity of the same state)

crimea has every right to secede to russia and thats exactly what they did by holding a referendum. the ukrainian gov does not have to agree for it to still be legal.

it would be advisable to understand the differences between annexation, cession and secession. they are 3 very very different methods of achieving the same or similar result, secession being the most democratic, peaceful and legal way of going about separating from the current nation who rule the region be it to join another nation or create their own sovereign nation .

bobs ur uncle

SIX PACK wrote: »

What's ****ing everything up for Russia at the moment is the war with Ukraine and the illegal occupation of Crimea. The sanctions imposed by the EU and US are clearly hitting Vladimir Putin where it hurts

also, this fall in the ruble and oil, a long with the civil war in ukraine is on the head of the USA who are hell bent on bringing down the emerging economies who threaten the petrol dollar and the dominance of the US and the FED by taking actions to move away from the dollar.

to quote a post from another thread:

do you know anything about russia moving away from the dollar and how it will affect the US?

do you know about the russian version of the SWIFT banking system they are building and how it will affect the US?

do you know about the currency swap deal with china and how it can/will affect the US?

BRICS bank?

doing deals all over to trade outside the dollar?

who has the most to lose from the dollar not being the reserve currency anymore?

what has happened to literally every other nation that has attempted to move away from trading resources in dollars?

why has america befriended cuba after 65 years?

why are they putting sanctions on n.korea(do you honestly think N.Korea has any interest in hacking sony? LOL)

why has america signed the "The Ukraine Freedom Support Act of 2014" which lets them provide "lethal aid" (arm them to the teeth) when the country is actually stabilizing?

where is the proof that russia has provided weapons/troops to ukraine?

why did the US media instantly with in hours start accusing russia of shooting down MH17 flight before any evidence was collected and not provide a single piece of evidence when doing so and still to this day not give any?

why did ukraine not hand over radar recordings or air control recordings EVER while russia handed over radar recordings straight away?

why was Malaysia not allowed to participate in the international investigation - the owners of the plane? why is ukraine in the investigation when they are a potential suspect in the case? why can any one of the countries veto the release of the findings if they dont like what was found?

why is NATO and the US consistently beefing up troop deployment along russian boarders while continues to request a diplomatic solution?

can you not see that the US has a very very long history of destabilizing anti-US governments and going to war with countries who attempt to move away from the dollar? why is this time different simply because its russia?

do you know how good putins approval ratings are? cameron and obama would kill to have approval ratings like putins..

why has the FED conveniently stopped QE3 and not commenced QE4 just when tensions with russia(and allies) are mounting?

why has the US government not released on single piece of evidence of russia supplying weapons to ukraine or supplying troops?

why did america lace russia with particular sanctions which they knew well(any one could have guessed) would affect the EU far more than russia?

why were sanctions the main focus of the "ukraine freedom support act 2014" on all mainstream tv, when supplying ukraine with lethal aid is far and above a much more serious article in the bill?

ASSUMING THEY DO ARM UKRAINE, WHY HAS THE USA BROKEN THE NUCLEAR ARMS AGREEMENT(Intermediate-Range Nuclear Forces Treaty) SIGNED BY THE US AND RUSSIA IN 1987 WHICH WHEN BROKEN, MAKES IT FULLY LEGAL UNDER INTERNATIONAL LAW FOR A PARTY IN THE AGREEMENT TO MAKE A PRE-EMPTIVE NUBLEAR STRIKE ON THE NATION THAT HAS BROKEN THE AGREEMENT?

WHY HAS THE USA BROKEN AN AGREEMENT WHICH THEY KNOW VERY FULL WELL COULD LEAD TO A NUCLEAR WAR DUE TO THEIR BREACH OF THE AGREEMENT?

ukraine is also, and has always been a highly corrupt nation. its a very well known fact that ukraine has never been "above board". The country is run by criminals, oligarchs and extremely corrupt "politicians".

to quote but one incident:

A serious dispute began in March 2005 over the price of natural gas supplied and the cost of transit. During this conflict, Russia claimed Ukraine was not paying for gas, but diverting that which was intended to be exported to the EU from the pipelines. Ukrainian officials at first denied the accusation, but later Naftohaz admitted that natural gas intended for other European countries was retained and used for domestic needs. The dispute reached a crescendo on 1 January 2006, when Russia cut off all gas supplies passing through Ukrainian territory. On 4 January 2006, a preliminary agreement between Russia and Ukraine was achieved, and the supply was restored. The situation calmed until October 2007 when new disputes began over Ukrainian gas debts. This led to reduction of gas supplies in March 2008. During the last months of 2008, relations once again became tense when Ukraine and Russia could not agree on the debts owed by Ukraine.

if russia, china and the rest of the emerging markets succeed in moving away from the dollar and start pricing oil/resources in currencies/commodities that the federal reserve and in turn the US gov do not control, the dollar will collapse, every major banks will fail, deposits will be confiscated contrary to popular belief(the FDIC insurance is a myth, and a bill was also recently signed that puts US tax payers on the hook for $300 trillion worth of derivatives by big banks, the article in the bill that covers this was literally written by citigroup one of the largest banks in america. hyperinflation would explode, there would be riots, food shortages, oil and gas shortages, imported goods would become far far more expensive and most likely the country would fall into a civil war.

The US has more to lose than any other county on the planet and they will do what ever it takes to prevent this transfer of power from west to east.

to answer one of the questions above, as the dollar rises in value it puts further strain on the emerging markets whos private(which turn into public debts) and public debts are denominated mostly in dollars. if these countries can make good on their promises to pay back these debts their economies will collapse and lead to a situation on par with Greece/Argentina. knowing this, and with the intention of putting further strain on the emerging markets, QE3 was brought to a halt, reducing the amount of dollars flowing into the system by approximately $85billion dollars a month. the rapid drop in supply growth has caused the value of the dollar to explode at a pace and scale only seen prior to the 2008 crisis(that should tell you something) which puts further pressure on the very nations who are challenging the dollar.

The US has done this time and time again to every nation that has every challenged the petrol-dollar dominance. the list of those nations is very long and the US has ether over thrown their gov or invaded the country.. iraq is a perfect example. they were in the process of creating their own gold currency(so the US couldnt screw with their currency) and were going to stop trading oil for dollars. everything after that is history.. (if you still think 9/11 was terrorist, do some research and you will find lots and lots of evidence that proves it was an inside job)

to sum up, this russian/emerging markets and oil crisis are all tied in together for one purpose: crush the economies of those who are challenging the dollar dominance and if possible, bring the US into another war.

conditioned games

Excellant post. I once was naive and believed western media as the truth. I am more educated now and after research i now realise the USA has been abusing its power for the last 40 years. Russia is not the bad guy but America's petro dollar has been the cause of so much death, destruction and mind games for far too long.

Interesting to see they allowed Holland return half their gold held in New York recently to keep them shut about their investigation into the MH17 plane crash. We are living in extraordinary times where the US is losing its corrupt grip on the petro dollar and worlds reserve currency. Many large banks will not exist years from now due to their exposure to derivatives and sheer size for any one country to bail out. For the average middle class guy that continues to believe western media lies the future does not offer much hope.

1st dalkey dalkey

The US will certainly fight to protect it's reserve currency status. It's current level of debt would be unsustainable without that status.
But the Crimea situation was Putin's creation.
Secession is indeed an accepted political solution with lots of precedent. But when the polling places are 'protected' by foreign military aka 'little green men' as we saw in Crimea, the process is debased.
Both the US and Russia talk a lot about sovereignty, but both readily ignore the sovereignty of small nations when their own interests require it.
The drop in the price of oil and gas is the real reason for the collapse of the rouble. The western sanctions are a minor problem for Putin as they are targeted at certain industries and people rather then the overall economy.
The price of oil and gas will stabilise when the level of production drops closer to the level of demand. That means either everyone agreeing equal % cuts or someone losing market share. This is the real problem. The Saudi's are no longer willing to be the only ones to cut production and therefore their market share.

ixus

Ukraine is payback on Russia for getting the upper hand on the US in Syria. The US were going into Syria until Kerrys blooper that gave Russia some room to manoeuvre.

lawlynch

As someone who has been to Russia many times over the last few years the collapse in the ruble was astonishing and I know the real impact its having on ordinary people over there. Its hard to see right now how it will get out the tailspin its in. Some very intelligent posts here though about the real situations unfolding around Ukraine and all the rest.

I am normally not one for conspiracy theories but you have to say all the macro economic factors are lined up perfectly for this situation (low cost of oil, traders pushing interest rates up, sanctions etc). Russia is in a bad way so I expect the currency to devalue further.
Longer term the US has to be affected also but as pointed out they will do all they can to avoid and as a result there are probably a few more rounds to play on this one.

I do think things will stabilize within 6-9 months one way or other as by then Russia will have either defaulted and you have hyper inflation but would eventually level off and then you might be able to get in but have a long wait to get a return or they will really batten down the hatches and implement draconian measures such as capital controls and try to fight it (which is their normal style) which makes investment unattractive or impossible. Also China might come to their rescue . bloomberg.com/news/2014-12-22/china-offers-russia-help-with-suggestion-of-wider-currency-swap.html

Possible saving grace might be world cup , but that could be also thrown up the air if things really go off the rails. I hope things get sorted out as there was great strides over the last few years opening up Russia to the west and it had great long term investment potential, now at this rate we could be heading for another cold war.

So in summary, don't invest now but look out for key indicators over next few months as to what way things will go.

1st dalkey dalkey

As you can see from the responders, the rouble decline is caused by multiple issues all complicated by global political and economic shifting sands. It is also suffering from the failure of Putin to diversify his economy. It may well recover, but not in the short term.
Investing is not a term I would use in such circumstances. Gambling would be a more appropriate term.
You could be a very long time waiting for a return on that 'investment'.

euroboom13

History shows if one currency (as big as Russia ) has a massive revaluation ,other currencies will follow .A lot of money to be made over the next couple of years for the brave.

el diablo

euroboom13 wrote: »

History shows if one currency (as big as Russia ) has a massive revaluation ,other currencies will follow .A lot of money to be made over the next couple of years for the brave.

The ruble is a pretty minor currency on the world stage. Even the economy of Texas is bigger than the Russian economy.

Russian would be a third world country (rather than second world) if it wasn't for their vast reserve of natural resources.

euroboom13

el diablo wrote: »

The ruble is a pretty minor currency on the world stage. Even the economy of Texas is bigger than the Russian economy.

Russian would be a third world country (rather than second world) if it wasn't for their vast reserve of natural resources.

Texas bigger than Russia?? On any level???

Russian Ruble not a large currency?

el diablo

euroboom13 wrote: »

Texas bigger than Russia?? On any level???

Russian Ruble not a large currency?

http://www.telegraph.co.uk/finance/economics/11297770/Russia-risks-Soviet-style-collapse-as-rouble-defence-fails.html

euroboom13

el diablo wrote: »

http://www.telegraph.co.uk/finance/economics/11297770/Russia-risks-Soviet-style-collapse-as-rouble-defence-fails.html

I am afraid, its not a realistic comparison.

It has adjusted Russia projections, after oil drop and after currency drop, without reducing Texas projections after oil drop.(could you imagine Obama swapping Texas for Russia! steal of the century)

It highlights how overvalued the dollar is !

neris

Wonder would a change in Russian leadership have any affect on the rouble and stops it decline? See an article on Bloomberg where someone is predicting Putin to go in 2015. The ordinary Russians dont seem to be getting to worried yet about their economy and from what Ive seen on tv they actually seem out the loop on the whole or dont seem to have a clue whats going on

"Either way, previously unthinkable events now look more likely. Byron Wien, a Blackstone Group LP vice chairman, predicting that Russian President Vladimir Putin will resign in 2015 and Iran will agree to stop its nuclear program"

http://www.bloomberg.com/news/2015-01-07/oil-at-40-means-boon-for-some-no-ice-cream-for-others.html

conditioned games

neris wrote: »

Wonder would a change in Russian leadership have any affect on the rouble and stops it decline? See an article on Bloomberg where someone is predicting Putin to go in 2015. The ordinary Russians dont seem to be getting to worried yet about their economy and from what Ive seen on tv they actually seem out the loop on the whole or dont seem to have a clue whats going on

"Either way, previously unthinkable events now look more likely. Byron Wien, a Blackstone Group LP vice chairman, predicting that Russian President Vladimir Putin will resign in 2015 and Iran will agree to stop its nuclear program"

http://www.bloomberg.com/news/2015-01-07/oil-at-40-means-boon-for-some-no-ice-cream-for-others.html

You mean the ordinary people in the western world don't have a clue what's going on with their economies? Putin will out last the leaders in the broken western economies, I fear a reality check is coming for many this year.

kravmaga

As the price of oil per barrell has droppsd this also has affected the Russian economy, remember the RUssian economy relies heavily on gas and oil exports to Europe. Sanctions are beginning t1o bite and for the avarage russian i am sure the appdoval rafing for ex Fsb director Putin will dwindle in the coming year, watch thjs space.....

conditioned games

Oil and commodity prices falling are short term, currencies around the world backed by nothing collapsing resulting in hyperinflation is longer term, at least 15 years world wide depression. Russia is in a better position to deal with the coming worldwide depression that was prevented in 2008 by the printing presses and debt, they are rich in natural resources and have been adding to their gold reserves. I suggest sometime between July and October this year we will see the difference between paper and real money.

euroboom13

After Lehman there has been a well coordinated dance between nations. Russian elite were putting roots in London long before we were made aware of any currency devaluation.

Oil price drop, has tied up the hands of the Arab nations, and with Europe/uk and fed, having pulled back all there interest rates ,are perfectly position to devalue more ,themselves.

Educating times .