Fwd: NP - The Russian Ruble Is Now Entering Free Fal

[David Morris]

Quote of the Day: Russian Central Bank Decides It Needs to Destroy the
Economy In Order to Save It
<http://www.motherjones.com/kevin-drum/2014/12/russian-central-bank-decides-it-needs-destroy-economy-order-save-it>

http://www.motherjones.com/kevin-drum/2014/12/russian-central-bank-decides-it-needs-destroy-economy-order-save-it

>From Neil Irwin,
<http://www.nytimes.com/2014/12/16/upshot/vladimir-putin-vs-the-currency-markets-what-to-know-about-the-rubles-collapse.html?partner=rss&emc=rss>
commenting
on the huge interest rate jump announced by Russia's central bank in the
wee hours of the morning:

It may go without saying, but a 6.5 percentage point emergency interest
rate increase announced in the middle of the night is not a sign of
strength.

Roger that. Russian central bankers hope that this will be an incentive for
people to keep their money in Russia, earning high interest, instead of
shipping rubles out of the country at warp speed and squirreling them away
in any safe haven that comes to hand. And maybe it will work.
Alternatively, as Irwin suggests, it may be viewed as a sign of
desperation, causing Russia's oligarchs to pile on the dilithium crystals
and ship out their money even faster. You never know what's going to work
when a currency crisis goes into panic mode.

In any case, even if it works, the price is going to be high. Here in
America, we argue about whether the Fed will choke off recovery if it
raises interest rates to 2 percent. Russia is now at 17 percent. Even if
this puts a halt to currency flight, it's going to kill their economy. In
Russia tonight, there are no good options left.

On Mon, Dec 15, 2014 at 6:34 PM, alice malice <alicewmalice at gmail.com>
wrote:
>
>  What did you expect? Russia can shovel shit against the tide and use
> capital controls, but in the long run, Putin has nothing and he ain't
> no cool hand luke.
>
> On Mon, Dec 15, 2014 at 2:38 PM, David Morris <fqmorris at gmail.com> wrote:
> >
> http://www.motherjones.com/kevin-drum/2014/12/russian-ruble-now-entering-free-fall
> >
> > Looks serious.
> >
> >
> -
> Pynchon-l / http://www.waste.org/mail/?list=pynchon-l
>
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