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Thursday, January 21, 2016

Putin the serial assassin proves he's no economist

Russian President Vladimir Putin addresses Russian Duma lawmakers during a meeting in Mria sanatorium about 30 kilometers (19 miles) from Yalta, Crimea, Aug. 14, 2014.
Russian authorities face pressure as ruble plumbs new lows President Vladimir Putin puts himself into plenty of photo opportunities where he can create himself as the center of international attention. Nevertheless, Putin's abuse of power is now pointing out how his reputation as an international bully, a serial murderer of critical journalists and an ally of the evil Syrian dictator Bashar al-Assad has made him a dangerous world leader. But, regardless of how self appointed and far reaching Putin's powers are, the fact remains that he's not an economist

In fact, Russia's economy is failing miserably and the problem starts with Putin. Now, the nation's worthless ruble is close to being better utilized as gambling chips, rather than real currency. Faites vos jeux! (Place your bets! Russia's failed economy will finally be Putin's downfall- and Assad along with him!)

Moscow (AFP) - Russia's ruble on Thursday plummeted to new record lows against the dollar, tumbling by over 4 percent at one point on the back of low oil prices and putting pressure on authorities to react.

Russia's ruble -- which was already battered over the past 18 months by low energy prices and Western sanctions over Ukraine -- fell briefly down to 85.99 to the dollar before recovering to around 84.3 in the afternoon.  (Hello? Calling that move a "recovery" is denying the curreny's prognosis. Rather, it's more like saying the ruble has entered the stage of "agonal breathing", and the currency is approaching the end of life!)

The ruble also fell against the euro, dropping to around 96.7 rubles per euro, before firming back up to around 91.75. (Yet, another last gasp!)

Russia's recession-hit economy relies on oil and gas for over half of its budget revenues and the authorities are coming under increasing pressure to act to stave off further damage to the currency.

The Kremlin insisted that the ruble's plunge was "not a collapse", saying the authorities would be able to stop the rot. (Well, surely Putin can lie as well as he does anything else. To say the ruble is not collapseing might be a stretch of truth, because the currency was already useless, even before the recent tumble.)

"The exchange rate is really changing, the rate is volatile, but it is far from being a collapse," spokesman Dmitry Peskov was quoted as saying by Russian agency Interfax. (In fact, the exchange rate on the ruble was always terrible and now it's even worse!)

"There's no basis to suggest the central bank does not have plans drawn up to avoid a collapse." (OMG! Side step the urgency!! In fact, if there were a viable plan to save the ruble from collapse, the Russians would've put it in place by now. Their "plan" was to flood the market with oil; except, now the world is awash in black gold and nobody wants Russia's oil. Why don't they want Russian oil? Because, nations don't want to deal with corrupt Russian vendors and oligarths, that's why.)

With oil hitting 12-year lows, the ruble on Wednesday slipped past its previous weakest point of 80.1 rubles to the dollar that it crashed to during a dramatic slump in December 2014. (How many ways can we say the Russian ruble is worthless?)

The Russian currency has so far this year lost over 12 percent of its value against the dollar, meaning that a recession officials had been claiming was essentially over looks set to last longer.

Meanwhile, Russia's Central Bank shrugged off the latest ruble slump and insisted it is not preparing to repeat the major rate hike it made in late 2014, as it struggled to save the currency.

Analysts, say that while the ruble's fall was down to factors mostly beyond Moscow's control, the authorities would have to react in some way to reassure the markets. (Sure, out of Russia's control, meaning oil is plentiful from other places....).

"It is understood that this is happening against a background of an international collapse with local factors being a part of it, but the lack of a reaction from the central bank and authorities raises some questions," Anton Tabakh from Moscow's Higher School of Economics told AFP.

But others argued that with Russia's currency just following the oil market, there was little that authorities could, or should, do.

"Ruble exchange rate depreciation is now purely a function of the collapse of oil prices, and thus represents an adjustment of the fair value of the currency and does not require any CBR presence on the market," Alfa Bank said in a note.

The government has already admitted that tumbling oil prices will push it to slash spending as it struggles to keep the deficit to under 3 percent of gross domestic product (GDP).

So far there has only been muted public criticism of the authorities under President Vladimir Putin (well,, under penalty of death!!), who tightly control the state media, and the strongman's rating remains close to an all-time high.

But with legislative elections coming up later in the year, the government will face a difficult time as it tries to keep a lid on public discontent and balance its books.

The International Monetary Fund (IMF) on Tuesday downgraded its forecast for Russia, predicting that the country's economy would contract by 1 percent this year.  (If this were a dismal projection of the US economy, the Americans would have called for a purge of the US Federal Reserve!)

The IMF warned that slower Chinese growth, a stronger US dollar and the collapse in oil prices could all wreak further havoc in struggling economies like Russia's.

Putins' control over the Russian people is maintained by fear. Obviously, Putin is not an economist. He's a dictator, but not an economist. Those who can offer Russia and Putin expert fiscal assistance are fearing for their lives. 

Nobody dares to tell the big Russian wizard behind the curtain that his smoke, and mirrors are about to be ripped awayby the oil glut, and his nation will plunge into abject poverty. Tragic.  

What'ss Putin's life expectency when the Russian people finally stand up to him, after they figure out how his charisma doesn't include economic leadership?  Does anybody have some worthless ruble's to place on the betting table?  Faites vos jeux!

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