At the latest Russian Government meeting Dmitri Medvedev has announced the Russian authorities are planning no additional measures to stabilize the Ruble as long as the current trend continues. And, truth be told, so far the measures taken by the Central Bank and the authorities did reverse the trend and the Ruble has been gaining some of what it lost against the Dollar:
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| Dollar/Ruble xrate 17-22 December |
Of course, there is much more to the current crisis as just the Ruble’s exchange rate against the Dollar or the Euro, but it is undeniable that, at least for the time being, the Ruble’s apparent free fall has been stopped.
So far, so good.
The Saker
By their professed lack of concern for the oil & ruble crashes, perhaps they knew this was coming & actually wanted to see a short-term tempest pile-drive crude down, even farther, to try to bankrupt the frackers?
putin especially has been completely calm & controlled opposite of nonplused these many months, like he’s waiting for something else to happen on its own that he’s been assured will happen! maybe he was actually in on trying to drive crude down closer to say the late 2008 low around $30 for $WTIC (I don’t have charts for TAPIS grade).
http://stockcharts.com/h-sc/ui?c=$WTIC:$ONE,uu%5Bd,a%5DDaclyyay%5Bdf%5D%5Bpb50!b200!f%5D%5Bvc60%5D%5BiUd20!Uk14%5D&pref=G
if so, then his judo flip actually fell short of his goal.
crude oil price(also blended as a % in commodity price indexes like CCI & CRB) seems to bottom out exactly this time of year, within a week, but only after at least 6 years, sometimes 7, from the previous big low.
(the free charts this site allow only recent data, 3 years maximum, & can only get free charts when outside stock market open hours to enter dates in fields below to look at data back to 1980.)
sure enuf, if we add 6 & 7 get 13 we see that late 2001, 13 years ago was also a huge $17 low!
heck, back another 13 to oct/1988, low hit $12.
so, the lows have been higher, by a lot each time, going back to the 1980’s.
and the highs get scary higher, which always come sure as rain after a big low.
There can be no shadow of a doubt that the oil price will soon zoom higher. This may take a year or at the extreme maximum two. In all probability the recovery in the oil price will arrive much sooner.
The reason for this is very simple. A huge chunk of global oil production is extremely marginal and wholly unprofitable at current prices. The longer the price of oil stays low, the more of this marginal production will go off stream. There is the added caveat that as investment in new production will be seriously curtailed next year, that will inevitably seriously restrict future supplies.
To put it very simply. The longer the price of oil remains low, and the lower it goes, the more violent and more parabolic the subsequent rise will be.
She gets it!
At issue was a section in the omnibus budget bill repealing the Lincoln Amendment to the Dodd-Frank Act, which protected depositor funds by requiring the largest banks to push out a portion of their derivatives business into non-FDIC-insured subsidiaries.
http://ellenbrown.com/2014/12/19/russian-roulette-taxpayers-could-be-on-the-hook-for-trillions-in-oil-derivatives/
that extremely odious timed passage by us congress last week of that leg that repeals the key prohibition on unlimited derivatives ties in to a “just in case” scenario of the $200- $300B in frack oil debt issued over the past 6 years mostly blowing sky high & vaporizing the world’s big banks.
Collapse of the USD versus RUB:
Spectaculaire retombée dollar quand les positions spéculatives CONTRE le USD se débouclent à Moscou. Rouble 54,4/1USD
http://www.politis.fr/Gaz-et-rouble-les-deux-dernieres,29480.html
From 70 to 54 in one week! Who is tumbling?!
This whole currency drama is but a sideshow.
The fact of the matter is that there is no reason for the Russian economy to perform any worse than the Western equivalents.
If the global economy crashes, then everyone is in for a bloodbath, and only those able to react quickly will survive the apocalypse.
If the global economy continues to grow, then Russia will outperform the west.
Don’t let short term fluctuations fool you.
Oh. I almost forgot. Yet another Chinese official (the Foreign Minister this time) came with an official statement that reads like this,and I am quoting here: “Russia is an irreplaceable STRATEGIC partner”
[from Blue]
I’d like see analysis from a good finance and economics person regarding what China wants and it’s relationship to Russia and the increased energy trade and contracts. I have to think that this would be a very significant factor.
“I’d like see analysis from a good finance and economics person regarding what China wants and it’s relationship to Russia and the increased energy trade and contracts. I have to think that this would be a very significant factor.”
Economoics is not the chief issue for China at this juncture. Obviously, Russia suits the the need of the Chinese economy for resources that Russia has in abundance. But China most needs Russia as a buffer with the West. If there were to be regime change in Russia to a Western friendly neoliberal one, then NATO would in effect be at the western border of China and the Russian nuclear capability also. It is of course unacceptable for China to have NATO at its western border and the Seventh Fleet on its eastern border with US bases ringing it. Russia simply cannot sit by and allow the US to effect regime change in Russia and it won’t.
http://www.strategic-culture.org/news/2014/12/20/how-cia-launched-the-financial-pearl-harbor-attacks-russia-venezuela.html
possibly true from Masden that the cia got Saud to frack on old oil with sea water and now they have to keep pumping oil so the sea water doesn’t damage oil fields ? I don’t know but sounds plausible… would explain the Saudi’s saying “we will not stop pumping” and telling opec off… hmmm
“…possibly true from Masden that the cia got Saud to frack on old oil with sea water…”
Highly unlikely.
a)they have actual oil drilling experts
b)you can’t frack with plain water salty or otherwise, complex chemical mixtures are used depending on the exact type of rock
c) when sufficient pressure is reached (varies with location, type of rock etc) the rock cracks and oil starts to flow therefore it is not possible to build up “excess” pressure
d) reducing or stopping pumping in the fracking mixture reduces the pressure and stops the oil flowing
e) oil floats on water, so water can do no harm to it
This was just the first idea this writer thought of to be able to blame the CIA for Saudis not reducing oil production. It is nonsense. Hey, let’s say it is true and they DID….Saudis could still stop producing from NEWER wells they didn’t salt-water-frack. See? nonsense, he didn’t even think it through.
You can see the guy is a nutcase when he claims a virus “wreaked havoc on nuclear power plants worldwide”….. yeah? since when do nuclear plants surf the world wide web to catch a virus? and he lists “legendary” CIA sabotage against just about everything just about everywhere. Nutcase.
re: the victims of the oil/ruble attack
It seems to me that the concerted attacks on the oil price and on the ruble has other victims than just Russia:
– Brazil will name “market-friendly” Joaquim Levy as finance minister – I see this as an important defeat for the BRICS (details here )
– Belarus seems to be panicking
– Venezuela is certainly suffering much more than Russia
and there may be other victims whose budget relies on commodities.
Was this intended or is it just “collateral damage”?
Intended, NotSoFast. Venezuela they’re mad at, how dare they not replace murdered Chauvez with someone to their liking? Poor Brasil trapped again. Cuba.
But these stick together. They’re Latin brothers (even if Brasil is Portuguese, not Spanish).
If the crash comes soon, this doesn’t matter anymore. The crash will strengthen BRICS, and they’ve all seen it is possible to survive very very serious attacks. They’ll be looking at Russia to see how it’s done, and Russia will be helping. The whole BRICS idea is for them to help each other out,without IMF’s murderous rules. By removing dollars from their trades and loans, people with dollars won’t be able to manipulate them, ever again.
BRICS being a mixture of currencies, there won’t be any one big one there, either, that can squeeze everyone else. They’ll be able to build industries that actually employ people, so their people get to eat.
I dream of the day — and pray I live to see it — when Mexico is so much better off than USA that Americans go to Mexico illegally to work.