Medvedev has just called a government meeting with most of the directors of top Russian corporations and the director of the Russian Central Bank. He immediately announced that he will not introduce any harsh regulatory measures and that he will let the market forces correct the situation. As for the former Minister of Finance, the one so much beloved in the West, Alexei Kudrin, he expressed his full support for the latest increase in interest rates.
The Atlantic Integrationist 5th column is clearly on a full-scale offensive. This is far more dangerous than anything the US, NATO or the EU are doing.
The Saker
Saker Message:
If Kudrin & Khodorkovski are praising this, then it must really be a disaster. I expect comments like “Russians have come to their senses” from Obongo and his white masters.
re: Ruble crisis: This may destabilize more than Russia
http://russia-insider.com/en/2014/12/17/1946
Defunding the failed policy of regime change in Syria
The Senate should seize the opportunity to defund the failed policy of arming and funding Syrian rebels, sometimes called the Free Syrian Army (FSA). They should filibuster the spending bill, if necessary, to get the Congress out of the business of arming extremists, and of prolonging the Syrian civil war.
The Obama administration is linking a proposal for $500 million in aid to Syrian rebels with the AUMF against the Islamic State. Due to the way in which the budget bill has come down to the wire, some members of Congress feel “blackmailed” to vote for it or face a government shutdown. Some Senators, led by presidential hopeful Rand Paul, would delink the war on the Islamic State from the funding of the Syrian opposition.
The first problem with the plan is a legal one. Under domestic and international law, many of the rebels should be considered as terrorists and war criminals for destroying public infrastructure, devastating Syria’s economy, firing missiles and mortars at Christian churches and civilian neighborhoods, using children as human shields, and plundering antiquities and the other national wealth of the Syrian people. Arming such people not only harms the various peoples of Iraq and Syria, but places those carrying out the policy at risk of facilitating war crimes, crimes against humanity, aggression, and even genocide.
http://thehill.com/blogs/congress-blog/foreign-policy/227006-defunding-the-failed-policy-of-regime-change-in-syria
Beware of the Five Eyes
+
Do Putin and eurasatic fraction sleep?
“The Atlantic Integrationist 5th column is clearly on a full-scale offensive. This is far more dangerous than anything the US, NATO or the EU are doing.”
I fully agree.
So, does Putin have any chances to neutralize them?
Listen to the following video titled, Russian MP Evgeny Fedorov: Central Bankers Suppressing Russian Economy
http://fortruss.blogspot.com/2014/12/russian-pm-evgeny-fedorov-central.html
Russian MP Evgeny Fedorov: Central Bankers Suppressing Russian Economy
Simple and concise explanation of the process being used to bring down the Russian economy void of the technobabble designed to confound the week minded.
http://fortruss.blogspot.com/2014/12/russian-pm-evgeny-fedorov-central.html
‘he will let the market forces correct the situation’ – how stupid – or ignorant – is he???! Market forces, i.e. Western ones, are the CAUSE of this!
The Central Bank as a 5th column:
November 5 the Bank announced a daily intervention limit of US$ 350 million, probably as a “trial balloon.”
November 7 came this very revealing interview with Evgeny Fedorov of Russia United Party (In Russian, French subtities:
http://www.egaliteetreconciliation.fr/Poutine-contre-la-Banque-centrale-vers-un-Maidan-russe-29744.html
November 10, the Bank ended its 20 year policy and free-floats the ruble which is under concerted attack (oil price, sanctions, etc.). This only makes sense if the Bank wants to damage the economy.
November 21 at the APEC Forum, Putin expressed confidence that the Central Bank would overcome the crisis using its existing policies.
Really, the Bank needs to do what Malaysia did with total success in 1998. it used currency controls to protect against the Asian “hot money” crisis. Russia should have done this already. It’s not impossible that MH370 and MH17 were covert warnings to not copy Malaysia’s 1998 strategy. Or not. But the point remains: protecting the ruble and protecting the economy requires capital controls. This has to be done with care to not prevent the repatriation of Russian capital, and to not have this become another source of corruption or inefficiency.
So 5th column in Russia is on full-scale offensive.. This or similar words in Russia or SSSR where actually often sad in times of represions.
Is in Russia some democratic proces? I think today even the West is saying opposite Yes. So who have the constitutional right in Russia to dismiss goverment or central bank? President or parlament – Duma? So if they will think, that the goverment is doing bad their job, they will dismiss they. I dont see any drama… Here in CZ is something usual that goverment is somethink doing and even majority of citizens are thinking it’s bad. Some day goverment will fall, when majotity of parlament think it too. Is this posible in Russia? I hope so…
For a little on the risk to the global economy of making the oil price fall, here’s video.
https://www.youtube.com/watch?v=qhyu_b3Wn3Q
I’ve been thinking about the earlier post here regarding the viability of Eastern Ukraine:
Ukraine As Seen Through The Eyes Of A Geologist
by Vadim Zolotaryev, http://matveychev-oleg.livejournal.com/1722656.html
Why do I get the feeling we’re being prepared to lose Novorussia? Donbass suddenly went from being the source of wealth of Ukraine to … meh, it wasn’t worth much to begin with.
I feel similarly about Medvedev’s assurance that Russia’s resources, gold and wealth fund aren’t worth much.
Better just to cave in now to the atlanticists and integrationists. Right?
A little OT but I’ve seen an analysis of Lavrov’s interview which upset so many people (me included).If the analysis is correct I feel better now:
http://fortruss.blogspot.co.uk/2014/12/how-to-read-lavrov-between-lines.html?m=1
17 december. Almost the darkest day, the darkest hour of the year. Most anonymous posts do nothing but trying to inject desperation and complete loss of hope.
We have been there before, after the loss of Slaviansk, the offensive after MH 17.
Let us all hope, or even pray (!) that things will turn out for nthe better…
Beware of the Five Eyes, You know there’s not the proverbial snowball’s chance of a filibuster against continuing the Syrian proxy war.
This is the Senate that voted UNANIMOUSLY to continue the Ukrainian proxy war against Russia by sending more implements of destruction.
These people have long since committed their souls to perdition.
Hey, Saker, thanks for the conti ued coverage and a Merry Christmas to you and your family!
Saker,
You took your eye off the Targeting Officer:
“This is far more dangerous than anything the US, NATO or the EU are doing.”
The T.O. is the U.S.
Petar said, “So, does Putin have any chances to neutralize them?”
Well, we know from a comment in his ‘state of the union’ that he knows the speculators are at work enhancing the problem. He seemed to threaten them: “We know who they are.” But perhaps he was speaking only of participating oligarchs at home.
I don’t know how one neutralizes a speculative attack when the speculators have virtually unlimited fake dollars against you.
Further, the steps he cd take to reduce the damage seem to be off the table– currency controls, etc. Ayn Rand would’ve said “the sanction of the victim”.
What about the allegation by Nemtsov and Kudrin that in order to finance Rosneft 625 billion ruble have been printed? It plays an important part of the present hysteria:
http://www.nytimes.com/2014/12/17/business/russia-ruble-interest-rates.html
http://www.nytimes.com/2014/12/17/world/europe/as-the-ruble-swoons-russians-desperately-shop.html
Alan Greenspan was Federal Reserve Chairman before Ben Shalom Bernanke
In his famous essay on gold and economic freedom published in 1966, he stated that gold stands as a
“protector of property rights”:
Alan Greenspan:
“In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.
This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.”——–
http://www.globalresearch.ca/the-manipulation-of-the-gold-silver-and-currency-markets/5365233?print=1
cheers.
Russia must see this economic assault as an act of war intended to overthrow the government. The appropriate response is to act in self-defense by imposing exchange controls, a la Mahathir in Malaysia in 1998.
https://larouchepac.com/20141217
By Anonymous_99
I’ve seen 2 Youtube videos about the Russian Central Bank.
(during an interview with Evgeny Fedorov)
And, it seems clearly, THIS IS the 5th financial column inside Russia!!
(It’s in Russian with French subtitles. AND it deserves English subtitles so that more people understands what’s going on)
# https://www.youtube.com/watch?v=n6kw7u4t6Gs
-L’impuissance de Poutine face à la Banque Centrale russe (FED) – Evgeny Fedorov-
Evgeny Fedorov, député russe, explique le rapport de force crucial opposant le président Poutine à la Banque Centrale russe, sous contrôle extérieur du dollar, de la FED et de ses dérivés mondiaux.
Le contrôle de la monnaie russe, via les banques de prêt étrangères et la législation financière (dépossédant la Russie de toute autonomie monétaire), permettent d’empêcher l’économie russe de se développer réellement.
Plus: sa dévastation est en vue: sous le motif des sanctions occidentales, la FED dépossédera la Russie de tout prêt de n’importe quelle banque du monde, même russe.
L’objectif en vue est de susciter depuis l’extérieur des révoltes sociales anti-Poutine en Russie et organiser un nouveau Maidan en 2015.
# https://www.youtube.com/watch?v=XiLg3kD6yQE
-L’économie russe sous contrôle bankster – Evgeny Fedorov-
Evgeny Fedorov, député russe, explique la domination du dollar à l’intérieur de l’économie russe.
Via sa Banque Centrale, la Russie est soumise à devoir emprunter à l’étranger pour investir sa propre économie. Ceci est le prix de la défaite issue de la chute de l’Union soviétique: l’absence d’autonomie monétaire.
L’absurdité d’une monnaie peu ancrée dans une richesse et une économie réelles, est qu’un pays appauvri comme l’Angleterre n’a rien d’autre qu’une machine à imprimer de la monnaie et doit pour survivre prêter à la Russie, qui détient un tiers de la richesse mondiale.
Hoping somebody will translate this…
Ondrej says, “So who have the constitutional right in Russia to dismiss goverment or central bank?”
Ondrej, After USSR was dissolved there was a period in which US & others treated the Russian Federation like a colony.
At that time they put into place a central bank which is independent of the govt, and even put its “rights” into the constitution. Most countries of the world are ruled by such a central bank, but in Russia’s case it is used for a more obvious attack.
This is because the central banks of the world, taken together, comprise a parallel ruling structure which is often able to dictate to the political structures with which we are all familiar. Those behind the US Federal Reserve and the Bank of England are at the top of this ruling structure. They and their oligarchic class desire to come fully to rule. This is what is meant by the New World Order. They must defeat Russia and China and the other last resisters to the truly satanic system that they plan.
To defeat their plan Russia must nationalize the central bank and the rouble, and withdraw from membership in the IMF where some of the central bank law originates. But for Putin to do these things requires firm and dramatic action, including sweeping out of offce those opposed to the break w Russia’s enemies.
Putin likes careful incremental change, and perhaps doubts the ability of the Russian people to withstand another period of disorder.
The legal ropes set up by the US in the 90s are given in Starikov’s book, pp24-40.
[pdf] Rouble Nationalization – the Way to Russia’s Freedom by Nikolay Starikov
Copy the link to temporary file, then click it to open this online book. It is not difficult to understand. Regards
Unfortunately, a large part of the Russian economy is controlled by oligarchs (mostly Jewish) who plundered the soviet state property with mafia methods. Many institutions and laws are very similar to the western laws and limit the sovereignty of the Russian state. The soviet institutions were dismantled in 1993 after Yeltsin used the tanks to bomb the parliament. So, Russia became a vassal to the globalised west during the 1990s and there are still very strong forces inside Kremlin that want full integration into the new world order of neoliberal globalization.
We have to thank for this Mr Gorbachev
who dismantled the USSR so he will have the chance to eat pizza hut
Ondřej said…
17 December, 2014 16:37
“So who have the constitutional right in Russia to dismiss goverment or central bank? President or parlament – Duma?”
On youtube there are videos such as the rise of Putin,2 if I remember correctly.
The first dealt with Yeltsin,part of the video shows Yeltsin dismissing Prime ministers and appointing others.
Under pressure from the Oligarchs led by Boris Beresovsky,he walks into the cabinet room,names who is to go,then smiles and say’s,
“now bugger off”.
The President can sack a government or Prime Ministers.
But the constitution presently forbids sacking the CBR director.
cheers.
I don’t know what is happening but oil is way up today, Russian stock market is up 10% and Ruble is back under 60 to the dollar from over 75 yesterday.
Was there a behind the scenes deal in which Russia is “backing down”? I doubt it. Even if Russia wanted to back down, (and I know it doesn’t) it wouldn’t matter. Once the Anglo Zionists smell blood they are like a shark. They don’t stop unless they have to.
Is it just a “dead cat bounce” as traders say, and the slide downward will resume tomorrow? Possible. We can’t tell by one day and its way to early to celebrate. But…
The bottom line is the Ruble is worth a lot more than 75 to the dollar and even western banksters can only manipulate so much. And so much of their strategy depends depends on illusion and the initial shock. Once the target survives the initial shock and starts seeing through the illusion, it can survive and the AZ plot starts to fall apart. Study any color revolution that failed (Iran 2009, Russia 2011) and you will see this pattern.
And so this is my guess of what the plan was and what is happening. Crash oil, crash the ruble. Create a whole media blitz of “Russia is Doomed! Russia Is broke! Putin has lead you all into disaster!” Then wait for Russians to panic and create a bank run, collapsing the major Russian banks, Maidan in Moscow, etc. If the last part of the plan (panic) doesn’t happen, the whole thing starts to fall apart. Because they can’t keep oil down for very long and as I said the ruble is worth a lot more than 75/dollar.
It turns out Russians don’t panic so easily, which was the flaw in an otherwise textbook plan.
[from Blue]
Letting market forces correct the situation is like letting a swarm of locusts harvest the grain. To think that greed, chaos, short term motivation, and disregard for societal needs will result in improvements in the world is as absurd as as the most childish, fanatical religionist refusing medical treatment with the conviction that some invisible supernal power will intervene and cure a broken limb or a plague epidemic. This is the silly faith in the invisible hand and the market — or it is the deception promulgated by one with hidden agendas.
Shall we get rid of snow plows and let the brownies and fairies clear the roads after the next storm?
The way to stop a black plague epidemic was to get rid of the rats — similar strategy needs to applied for the economy.
__Blue
@ OP: Well yeah… but then, there’s this:
Rouble vs. Dollar Games – From a Perspective of a Russian Businessman
“[…] Let me explain:
– Our country has a stock of dollars
– The currency of our country – roubles – is held by other countries
– We – Russia – are planning to sell oil for roubles in the future
– Everyone who buys oil from us in the future will have to look for these roubles to buy oil
– The harder it is to look for them, the more expensive they will be
Naturally, the task is simple – we need to drop the rouble to the bottom, and then buy all the roubles that we can, giving away the dollars that are no longer needed and not guaranteed by anything. This will help concentrate all of the roubles inside the country and to assign their price independently, while holding and releasing more money to the market.”
LINK> http://fortruss.blogspot.co.uk/2014/12/rouble-vs-dollar-games-from-perspective.html
-TL2Q
ALTERNATIVE VIEWS OF PUTIN AND RUSSIA:
First, I am a Putin agnostic. Second, I presume this attack on Russia has been very carefully gamed by a full quiver of experts to analyze the RF decision making process. I would guess this war, and it surely is a war, has been studied from every angle possible with multiple scenarios gamed in advance. Third, I would guess that Russia’s turn toward China has also been anticipated in these scenarios. Fourth, the Donbass rebellion was not welcomed by the Kremlin nor by the Chinese. Its continuation gives US/NATO a significant leverage point. Fifth, Putin’s commitment to free market capitalism is in conflict with his commitment to Russian culture and this too has been turned to a US/NATO advantage with the drop in the ruble. In other words, Putin is surrounded by a fifth column and that fifth column is in his own mind. he simply will not act decisively.
Finally, the Anglo/American empire is acting with confidence that they have dealt the RF and Putin a bad hand at the poker table and they know the cards he is playing. It is a losing hand and he will eventually have to fold.
This is only a hypothesis. It may be wrong and/or simplistic. But I put it out there for consideration.
The U.S., the greatest nation in technology, has come to Russia, that miserable little wannabe, for more rocket engines.
Orbital Sciences will buy NPO “Energomash” 60 engines for $1 billion.
The US AF Atlas V uses rocket engines from Russia, and Orbital has to buy engines.
If you want to lift heavy stuff, you have to go Russian.
Those miserable little wannabes . . .
correct.
Orlov & the saker’s synopsis from yesterday is also correct, Putin can only wait for this to become a political problem, for that’s the ground he is strongest on and can act from.
will Putin be able to place the blame on the Atlanticists, in order to generate enough public trust to have them excised from positions of authority altogether?
An interesting read: Oil, Ruble and Ideology A drop of a political nature? This is not a replay of 1998. Russia is not an oil state.
Back to the Ruble
We notice that the strong depreciation of the Rouble corresponds to a peak in repayments, but that the situation will loosen up in early 2015. It is sure therefore that the exchange rate will reverse its tendency in the first semester of 2015. The question is, up to what point? If the Rouble stabilizes around 50 roubles for 1 USD, inflation will be strong next year and could reach 12%. If we witness a rise in oil prices and the Rouble stabilizes around 40-42 roubles for 1 USD, the inflation rate could amount to merely 10%. Still, this implies that the Central Bank of Russia keep an eye on such establishments which could be tempted to speculate on the exchange rate, dragging it farther down than it should normally be. Explicit threats were made by President Putin at the occasion of his declaration of general policies before the chambers of parliament on December 4th. However spectacular it has been, the depreciation of the Rouble by no means puts into question the financial stability of Russia. The trade balance remains in excess, with an amount outstanding of 10 billion dollars a month. This is largely sufficient to face up to coming payments. The budget is actually profiting from this depreciation, which should allow the government to spend a little bit more in 2015.
Russia will therefore remain one of the least indebted countries in the world, which is not necessarily an advantage and goes to show that, provided it takes up debts internally, the country wields over a strong potential for investment and development.
http://russeurope.hypotheses.org/3146
This looks like a good place to start,on this thread.
People who believe this forex BS need to learn before opening their mouths.
Nations who have crippling debt, who’s currency is issued as debt,these are valuable notes ???.
http://usawatchdog.com/is-ruble-collapse-act-of-war-paul-craig-roberts/
It both saddens and irritates me that young people are so badly educated and quite deliberatley so.
These electronic markets were created to control and manipulate all valuations,’demon’-itize gold and silver as ‘money’ and determine ‘price discovery’.
It has been a 100 year project, which has gone wrong… for the manipulators..those geniuses who never foresaw the vast changes brought about by advances in technology,the rise of China, and the recovery of Germany.
The UK and USA have no ‘Naroda’,
they are finished…’bar the shouting’… as they say here!, sheep do not fight,they just get sheared.
Bring all the roubles back home, send all the dollars back home and KABOOM!…see how quickly those US bases need to be funded by the host countries.
cheers.
If Russia is afraid of the free market , game over. Checkmate
[from Blue]
Federov is amazing and makes wonderful sense — he should be Premier.
And have a bigger desk, maybe a bigger office, so he isn’t so cramped.
Maybe central banker should attend a big party, entertained by questionable little boys, and secretly videotaped and caught out in public?
That’s just the empire’s and the fascists’ style
__Blue
The RussianCB scheme has parallels to the Reichsbank mess.
When the 1923 Rentenmark was issued, it impacted the German hyperinflation but did not stop it.
Schacht then attacked the wildly excessive credit/money creation by ordering a “credit bar” for the Reichsbank to stop discounting Bills, etc . This action stopped the inflation and the new Reichsmark stabilized.
In fact, Schacht 40 years later explained that the Reichsbank actively and covertly continued to issue credits/money.
The Reichsbank was a PRIVATE + GOVERNMENT scheme of conflicts of interests. Key operations management covertly subverted the orders to cease wild credit/money creation that was “legally” ordered by Schacht. Only after he was able to exert control did the Reichstag enforce the “credit-bar” by enforcing the stop-discounting policy. The Reichsbank had failed to regulate other banks and instititions. Finaly in 1924 the mark stabilized in about 2 months.
To help understand, here is some background.
The Goldmark died back in 1914 when Germany ran out of gold. The Papermark then issued and was hit by hyperinflation by 1922.
In 1923 the Rentenmark was issued at 1 Rentenmark = 1 Billion papermarks [also called Old Marks]. The Rentenmark was backed by land and other industrial hard assets so was accepted by the people for domestic use only.
In 1924 after the Rentenmark and then Schacht’s “credit-bar” stabilized the value of the money, The Reichsbank issued the new Reichsmark at 1 Reichsmark = 1 Rentenmark.
[Note: European “Billion” means Million-Million, whereas US “Billion” means Thousand-Million. Maybe that helps.]
There is more data on the Reichsbank’s conflicted interests that were deliberately created so its PRIVATE-control aspect could covertly operate under the cover of its apparent Government-control aspect.
Compare this to the operating structure/personnel of the current RussiaCB, which was IMO originated by InternationalMonetaryFund sources.
from Rick with hopes for The Best There Is In Man.
edit-last part of my post was lost:
The RussianCB scheme has parallels to the Reichsbank mess.
When the 1923 Rentenmark was issued, it impacted the German hyperinflation but did not stop it.
Schacht then attacked the wildly excessive credit/money creation by ordering a “credit bar” for the Reichsbank to stop discounting Bills, etc . This action stopped the inflation and the new Reichsmark stabilized.
In fact, Schacht 40 years later explained that the Reichsbank actively and covertly continued to issue credits/money.
The Reichsbank was a PRIVATE + GOVERNMENT scheme of conflicts of interests. Key operations management covertly subverted the orders to cease wild credit/money creation that was “legally” ordered by Schacht. Only after he was able to exert control did the Reichstag enforce the “credit-bar” by enforcing the stop-discounting policy. The Reichsbank had failed to regulate other banks and instititions. Finaly in 1924 the mark stabilized in about 2 months.
To help understand, here is some background.
The Goldmark died back in 1914 when Germany ran out of gold. The Papermark then issued and was hit by hyperinflation by 1922.
In 1923 the Rentenmark was issued at 1 Rentenmark = 1 Billion papermarks [also called Old Marks]. The Rentenmark was backed by land and other industrial hard assets so was accepted by the people for domestic use only.
In 1924 after the Rentenmark and then Schacht’s “credit-bar” stabilized the value of the money, The Reichsbank issued the new Reichsmark at 1 Reichsmark = 1 Rentenmark.
[Note: European “Billion” means Million-Million, whereas US “Billion” means Thousand-Million. Maybe that helps.]
Also, that made 1 US Dollar = 4.2 Reichsmark. [Earlier pre-inflation, 1 USD = about 4.4 Papermarks.]
At that point, apparently foreign interests had failed to permanently cripple Germany using The Economic Weapon via the Reichsbank. [Who woulda thunk of such treasonous activity.]
The story of how the Reichsbank was created with such conflicting, even treasonous interests is for another post.
There is more data on the Reichsbank’s conflicted interests that were deliberately created so its PRIVATE-control aspect could covertly operate under the cover of its apparent Government-control aspect.
Compare this to the operating structure/personnel of the current RussiaCB, which was IMO originated by InternationalMonetaryFund sources.
from Rick with hopes for the best there is in Man.
Roberts gives two possible explanations for the ruble collapse:
1) hedge-funds/currency speculators/Soros attack
2) attack by the US government (FED trading desk)
Perhaps a combination of the two.
According to PCR, there is no ‘objective reason’ for the collapse. Russia has low debt levels and lots of reserves and no trade deficit. Just like Orlov, PCR accuses Russian elite’s as being too liberal and advises to not let your currency be freely convertible against western currencies. Just like Orlov, PCR is actually quite upbeat about the prospects of Russia.
https://deepresource.wordpress.com/2014/12/17/paul-craig-roberts-discusses-ruble-collapse/
Kind regards,
Dutch
@Penelope:
Your link https://www.youtube.com/watch?v=qhyu_b3Wn3Q is highly informative indeed. I found it to be a rarely easy to understand expertly explanation of the present predicament.
Wall Street Journal and Ruble Rout…or so they are calling it. They did refer to someone called Alexei Lulyukayev from the Central Bank saying that regulatory measures are on the agenda to deal with the capital foreign exchange market but not for Capital-control . Doesn’t one include the other in some ways especially if people are allowed to walk dollars out of the country? Then there was another article talking about speculation that Russia will have to sell gold reserves to meet their debt payment? Wow, these folks are maliciously gleeful. Credit being more expensive will cause price rises ( at least by 15% by Jan) at the same time putting small banks and businesses out of business so there will be inflation/deflation together?
Putin addresses the nation on Thursday.
Well, Saker, I know you’re a lot better informed on internal politics than I am, but I read this news slightly differently. To me, “more of the same” is another way of saying “Russia will not blink.”
Russia is prepared to take oil down to $40. We’ll see who hurts first. It’s not going to use its reserves to support the Ruble when it has much more productive uses for reserve currency. It will raise the rate more if it has to – this is standard practice. If it gets pushed into capital controls it will go there I would guess, but there seems strong cultural experience saying not to go there at all, if possible.
The Ruble is floating with the oil price. This really puts the focus of this war on the oil price. Can the US even reverse this now? Currencies are falling around the world, the knock-on effects from this cute trick with the oil price may bring down whole economies eventually. Russia will still be standing. Even in a system created by the West, Russia’s central bank and its government have an array of tools they haven’t touched yet.
The world is hurting with this war on the Ruble, hurting far more than Russia. Russia continues to get income, because the Ruble matches oil. Why would Russia spend money to raise the price of the Ruble and decrease its income – a double loss? It’s simple enough to institute internal policies for low interest loans to business (already on the cards, I read somewhere yesterday) and subsidies to poor Russians. Russia won’t blink. Cracks will appear everywhere else instead.
I’m quite sure about what I wrote so far but now I’ll go into shaky ground. I’ll speculate that the 5th Column is walking on eggshells right now and working with the government and the central bank. Everyone is on best behavior during this crisis, knowing that the long knives are not far away. So much for my 2 cents of speculation.
I continue to believe that the policies are reasonable, and good strategy. The Ruble is essentially tied to oil, today’s modern gold-substitute. Russia will not blink.
The French New Right has discovered Putin as the new de Gaulle. Better late than never.
https://deepresource.wordpress.com/2014/11/25/the-second-american-revolution/
(article in French)
Kind regards,
Dutch
There is a problem with the anti-Atlanticist logic here, and that is that Russia has interests in the West which must be adhered to and respected.
It is only a narrow (but well positioned) faction in the West that want to spread trouble throughout the world, in time they will be routed.
Much like Russia and Ukraine have a mutual interest in each other’s prosperity, so with Russia and the West.
Russia is a Western country, in the truest sense of the word. The problem is that narrow faction of mostly Jews and some old line WASP hangers-on. Eventually we will get a balanced and harmonious world order; the skill is in minimizing the damage the bad people can do in the mean time.
@LJ:
Excellent analysis.
For months supporters of Russia on this blog and others have been boasting about Putin playing chess while “Obama is playing checker” as though the U.S. had not game every single scenario imaginable.
Those comments made me very uneasy. They violate a cardinal rule in warfare: never underestimate your ennemy (again this is something PCR pointed to repeatedly… he didn’t think Russia realized what they were up against).
Anyway, the last two days have been a rude awakening.
The good news is… those who were bragging until this week but are downbeat now make another mistake: Russia and Putin or whoever in his government would never, ever, lay out their strategy publicly in a speech. Speeches don’t matter.
Did the U.S. announce they would work with the Saudis to crash the oil market? did they announce they would work will Wall Street and the city of London to speculate against the ruble? of course not.
I can’t believe that people still think that the US and the Saudis conspired to bring down the oil price. The low oil price is hurting the US shale oil boom as well as the Canadian tar sands production. There are already signs that the North American unconventional oil bubble is bursting. The only possible scenario in which I can see a conspiracy behind the fall in the oil price, is that the Chinese along with the Saudis are behind this. China gains immensely from such a development as they will not only benefit from vastly improved terms of trade, but in this way they can enter economic negotiations with any oil exporting country on far more favorable terms.
The more likely explanation of course is that the recent collapse in the price of oil is due to a fledgling global economic slowdown and excess crude production largely due to the north American oil excess. Remember that the oil market is extremely inelastic. A small excess in the market is enough to send prices sharply lower. Conversely, a small shortfall is enough to send them soaring.
I will agree with you that if the Russian government has any serious plans for monetary policy reform then it would be totally idiotic to even hint at them from beforehand. Especially in this war situation they have been forced into.
Suggestions to “Bring all the rubles back home, send all the dollars back home” are interesting in reference to HjalmarSchacht’s actions to remedy German hyperinflation.
The 3rd major action of Schacht was to return to its owners all forms of privately-issued paper that was being used to substitute for the sinking mark, aka
Papermark.
There seems to me a similarity here with the call to return USDollars by selling them for Rubles and repatriating the Rubles.
Also, Schacht banned Reichsbank’s practice of creating tremendous amounts of credit/money via
discounting [e.g. bills of lading] and privately-created promissory notes that the Reichsbank was accepting for discount. That last especially made the industrialisy giant Hugo Stimmes howl in protest, as he widely created his own paper notes to pay employees, for example.
So the suggestion to sell [return] USDollars as a way of repatriating Rubles deserves attention by the “experts”, hopefully the right “experts”.
from Rick whose barnacles were thinned-out in drydock.
Obama approves additional sanctions. The onslaught continues. We are at that fuzzy demarcation where economic war morphs into the kind with live bullets.
They say war is en economic phenomenon –the convulsion at the end of a cycle’s last business gyration.
One has to hope our psychotic elite are crazy like foxes –or are they mistaking Russia for Libya through glasses fogged by decades of stagnant megalomania?
It times like this that one almost hopes Putin is the designated bad cop in a false dialectic, and not the Last Great White Hope he often appears to be. If the former, at least the nuclear bullets won’t fly.
http://rt.com/usa/215387-obama-bill-russia-sanctions/
Something I don’t understand about the MH 17,is if the Russians are 100 pct sure they ukies did it and if they have real date,photos,tapes or whatever..why don’t they show they to the World via a big press conference for example?
Would it be possible that what the West says is right(naf or rf did it)?
Which would explain why RF does not react with more actions.Because if the ukies did it and if the russians have solid proofs,this would cause devastation in the West and it will break up the US/EU coalition and stop attacks(being financial or military one).
We are not connecting the dots,something seems to be missing..
Let’s say Russia comes out with all the evidence in the world proving what we all know happened. Who in the brainwashed West will believe Putin instead of their own propaganda? The Western press will not even cover such an event. To the extent that they do, let’s try and imagine how that Western mainstream media coverage will be. People believe what they want to believe most of the time. Just look at how enduring the 9/11 mythology has proven to be. Even I (always suspicious of we propaganda) had a serious problem with accepting that such devilry was possible.
re Joat @17 December, 2014 17:51
“… the constitution presently forbids sacking the CBR director.”
You are in error. Article 83 clearly states:
“The President of the Russian Federation: …
d) shall nominate to the State Duma a candidate for appointment to the post of Chairman of the Central Bank of the Russian Federation; shall raise before the State Duma the issue of relieving the Chairman of the Central Bank of the Russian Federation of his post; “
http://archive.kremlin.ru/eng/articles/ConstEng4.shtml
http://archive.kremlin.ru/articles/ConstMain.shtml (in Russian)
With the support of the Duma, which the President has now, he can dismiss the head of the CBR.
“Before the First World War a certain picture postcard was freely sold in the Jewish shops of Russia, Lithuania and Poland. On this postcard a rabbi was shown holding Torah in one hand and in the other Nicholas II, the Czar of Russia, cartooned as a white pullet with the Romanoff crown on its head.
Under the picture the following text appeared in Hebrew: “Sa chaliphati sa temurati, sa kaporati.”
This means: ” This sacrificial animal shall be my absolution, it will be my substitute and expiatory offering.”
The Hebrew text is actually part of the prayer called ” Kaporah “.
The rituals relating to this sacrifice are contained in Leviticus (chap. xvi 15).:
” Then shall be kill the goat of the sin offering, that is for the people, and bring his blood within the veil, and do with tbat blood as be did with tbe blood of tbe bullock, and sprinkle it upon the mercy seat, and before the mercy seat.”
Some rabbis opposed this doctrine. But wherever Cabbalists [Kabbalists] were living among Eastern Jewry, on the day of atonement a white cockerel and a white pullet were usually sacrificed in lieu of the goat.
This postcard was thus an open invitation by Jewry to murder the Czar. Hatred against Czarism was already latent in consequence of the pogroms, but it was kept at boiling point by the Mosaic commandment: “. . thou mayest not set a stranger over thee (as king) which is not thy hrother.”
When Bolshevism broke out the Czar and his family were murdered in Ekaterinburg. The Czar’s murderers were Jacob Swerdlow, who became later the President of the Soviet Union, Jacob Jurovszkij, Chajim Golocsikin and Peter Jernakow, all Jews”.
Do you know that in the pre-Maidan days “souvenir shops were selling patriotic mementoes in the national colors of yellow and blue, and even toilet paper with the picture of Putin and an unmentionable word beneath his face”?
Isn’t that clear that Russia is under “herem” from the dybbuks, like in the times prior to the Revolution and that there are open calls to assassinate Putin? How would you explain the fact that Europe, USA bend over backwards to do things against their own interests? Clearly they consider it a religious duty, as commanded by the dybbuks (and Kolomoyskyi is one of them – founder of “The EJU group was founded in the Spring of 2011 by Ihor Kolomoyskyi and Vadim Rabinovich after the two failed to secure leadership positions in other European Jewish organizations, the man that the Haaretz dubs “the most powerful Jew in the world?”.
WizOz, what an informative post, though I would add that Judaic virulence is directed not by Jews but by satanists—which explains why most Jews are confused or horrified and innocent.
The rouble should either be freely convertible to other currencies (as it is now) or it shouldn’t be. As I understand it, it is the view of Medvedev, the so-called 5th columnists, and Putin (for the moment) that the rouble should remain fully convertible. It is the view of Saker, and other so-called “Eurasian Sovereignists” that there should be currency controls put in place, to “take control” of the central bank, as China has done. This is a huge decision, which one man (Putin) does not and should not have the power to make. (It would take a vote of the full Duma and Federation Council.) There are definite advantages in having a freely convertible currency. It is a matter that requires very careful consideration.
It is a straightforward issue really. Some serious Western economists have praised the fact that Russia is the only emerging market that has a fully free floating currency (not anti Russia ones) It is true that such an arrangement has certain advantages. If the west was not rabidly anti Russian, then it would be a massive boon for the Russian economy. But since this is a world of geopolitical rivalry and since open war has been declared against Russia, liberalism should go out of the window. The successful Chinese model should be adopted despite the serious difficulty in efficiently implementing it. I have repeatedly stated that capital controls is the least bad way forward for Russia.
Hi Saker, Funnily enough I was on the phone with a Russian lady who has lived in US for 20 years. I told her about your webblog and gave her link, but I somehow doubt she will be willing to help with translations…too bad..
Hi Michael McDonnell, good point about the Jews…by the way, I’ve seen your name over at Dublinsmick…I don’t go there very often, because its too much info in too small a space for me,. but he’s certainly an interesting guy.
An article on zerohedge.com, claims that China is closely monitoring the ruble situation and the implication being that China is willing to provide financial support for Russia.
If true that would be an excellent cause for celebration.
I agree with you. Putin can sink any military, PR or diplomatic victories with the wrong economic policies.
Putin has never corrected the intrinsic flaws of the Russian eocnomy that the Chinese have been critiquing Russia for–the absence of a manufacturing sector for the past 20 years.
Putin still, is far too concerned with bailing out his pet oligarchs and certain businesses rather than in vesting in a new manufacturing sector. That is what Russia’s bank reserves should be going for. Not to insure the profts of failed corporations. That exactly smacks of what the US system is all about–heaping the derivative debt of the bankster class, ensuring their profits, upon the citizen taxpayer of the US. Impoverishing the whole society for a few.
How can Russia save anyone, if they cannot save themselves? Spare the rhetoric. It’s the same problem everywhere–capitalism. And dressing it up in nationalistic clothing isn’t going to change it. Capitalism makes culture, people and values the same everywhere.
At the end of the day all the rhetoric about the Russian people falls hollow and empty. It is really still about about the Russian oligarchs and proppping up private enterprise.
We have yet to see if Putin can rise to the occasion and be the great leader. If not, then he should just pull out of Eastern Ukraine if he cannot transition Russia’s internal economy. This could well be Putin’s Achilles’ heel.
Russia’s strength in 2014 was
1) calmness
2) adherence to international and domestic law
3) decisive action that was against expectations and used the enemy’s thrust against him.
There is little indication that the President has suddenly fallen asleep.
International finance is the current theater of war.
Putin has laid responsibility for the economy at the RCB. Quote: “Of course [we] may rail Nabiullina but …” ;).
If she fails to deliver, Article 75 of the Russian Constitution and law Nr. 86-FZ (2002) will obviously be changed quickly (see: http://www.cbr.ru/eng/today/?Prtid=bankstatus).
Until then let us enjoy how the West squirms and plays “good cop – bad cop”.
Good cop:
17.12.2014: Barack Obama announced a series of remarks on improving diplomatic relations between the United States and Cuba.
Bad cop:
17.12.2014: Russia not fit to be part of international financial system – Cameron
And on and on:
16.12.2014: UBS Sees Mild Forms of Capital Control Possible in Russia
17.12.2014: Upper House plans probe into Central Bank role in ruble crash
18.12.2014: Putin: Russia’s Central Bank Needs to Act Half Step Quicker
“Actually, this is the business of the Central Bank to lower [rates] or not to lower them, they need to feel this and react,” Putin said.
“Of course [we] may rail [Central Bank Head Elvira] Nabiullina, but don’t forget that as a whole their policies are correct and the Central Bank isn’t solely responsible for the economic situation in the country,” Putin added.
To Suvarov @ 22.37 17 dec
I get the info from Nikolay Starikov’s book ‘Ruble Nationalization’
“
‘Article 12. The Chairman of the Bank of Russia is appointed by the State Duma for a term of four years by a majority of votes of the total number of members of parliament.
The candidate for the post of the Chairman of the Bank of Russia is presented by the President of the Russian Federation. The State Duma is entitled to dismiss the Chairman of the Bank of Russia upon the recommendation of the President of the Russian Federation’.
Is that clear? The Russian President introduces and the State Duma appoints. The Duma as well dismisses the Chairman from the post. But this is just the beginning. The law is written in such a cunning manner that the possibility to dismiss the Chairman of the Bank of Russia from their position for the President and the State Duma is purely theoretical. In order to make sure in this, let us just read article 12 to the end.
‘The Chairman of the Bank of Russia can only be dismissed from the position in the following cases: 1) expiry of term in office; 2) disability which makes performance of duty impossible and which is confirmed by a state
medical commission; 3) there is a personal resignation letter; 4) the person in question committed a penal offence and was found guilty and sentenced; 5) if federal acts regulating issues related to the activities of the Bank of Russia have been violated’.
So, apparently, if the Chairman of the Central Bank: 1) is fit as a fiddle, 2) the term in office has not expired 3) is not willing to leave the job, 4) does not pinch wallets off old ladies, 5) observes the federal legislation (that is, does not credit his own country) — dismissing the man is impossible.
He can even pinch wallets off old ladies but until there is a sentence from court, the State Duma cannot dismiss him. The Russian president cannot do anything either. It is interesting, is it not? Cannot the head of an organisation appointing a financial director dismiss him with a decree and appoint a new one? Or does he have to wait for four years? Or a sentence from court? Or summon a medical commission? No, in reality, the head of an organisation is free both to appoint and dismiss his subordinates. The head of state in Russia is the President. All other governmental officials are his subordinates whom he controls, not directly, but through ministers, governors, mayors, generals and admirals. And only the Chairman of the Central Bank is beyond time and space. The President cannot dismiss him or give him the sack. And if he does, the banker can appeal an international court.”
….
If you have time it is available online free,
cheers
Read the Constitution, Joat, or read the law on the Central Bank, which I cited earlier to Penelope. It is very clear. I only gave the URL for the Law in Russian, don’t know where to find an English copy. (Although some of the codexes have been translated.) Everything you’ve cited in the Law is in Glava I, General Provisions. You can translate the first line of each Stat’ya easily by pasting it into Google translate, and if it is relevant, like the one about the Duma, past the first line of each paragraph (called Chast’) until you find the one you want. I read Russian well enough myself to scan it quickly and translate what I want, but not more than that.
See for your self, not what somebody has told you. My contention is the President and Duma together have more than enough authority to do what they want. Any legislative authority they’ve temporarily (unwisely) granted the CBR can be taken back.
Christoph:
“17.12.2014: Barack Obama announced a series of remarks on improving diplomatic relations between the United States and Cuba.”
Yes Christoph, this is stunning. Already 3 of the 5 Cuban spies incarcerated by the US have been set free.
I could be wrong but I view this as a desperate panic attempt on the part of the Empire to forestall any renewed Russian partnerships with Cuba. As this had already been agreed to at the visit of Putin to Cuba.
Cheers,
Christine
Dear Saker,
I think you are overblowing the “internal 5th collumn” threat.
IMO, the imposition of capital and exchange rate control is a pretty big decision which would have negative consequences in the short to medium term. That sort of move is not required at the moment.
The fundamentals of the Russian economy are sound (better than the West’s). It’s better to weather the storm and let the market settle down. The Ruble is way to undervalued and sooner or later it will correct upwards….it’s already bounced significantly in the last 24 hours.
Pepe Escobar has an interesting article on RT…
What Putin is not telling us
http://rt.com/op-edge/215675-putin-economic-sanctions-us-oil/
@Michael McDonnell,
Please check also the following quotation (it is from a book entitled “THE SUICIDE OF
EUROPE. MEMOIRS OF PRINCE MICHEL STURDZA,FORMER FOREIGN MINISTER OF RUMANIA”.
“From several sides I had been advised that Mr . Louis Marshall’s cooperation could
be a decisive influence for our project (float a loan of three hundred millions for Romania on the New York market, n.n.). Mr. Marshall was the lawyer of important New
York banks including, if I remember well, the Otto Kahn, the Warburg, the Jacob
Schiff, and Kuhn-Loeb institutions. I called on Mr. Marshall, and although our meeting
started in a rather agitated atmosphere, it ended very peacefully . When taking leave of
the famous lawyer, he showed me that part of New York that could be seen through
his Wall Street window, and told me : “Look what we can do for a country we love,
in Russia we have shown the world what we can do to a country we hate”.
Nothing has changed an iota.