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Post by warrior1972 on Dec 16, 2014 3:17:14 GMT -8
The ruble plunged by about 12% Monday, meaning it's lost nearly 50% against the dollar this year. Early Tuesday in Russia, the central bank hiked its key interest rate for a sixth time this year to 17% from 10.5%. A double-whammy of collapsing oil prices and Western sanctions is driving up inflation. Cash is flooding out of the country and the risk that some Russian companies may default is increasing. Russia's central bank has not only been raising interest rates, but has spent nearly $90 billion trying to defend the ruble and prevent prices spiraling out of control. money.cnn.com/2014/12/15/investing/russia-ruble-economy-crash/index.html?hpt=hp_t2 |
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Post by Sailor on Dec 16, 2014 10:25:12 GMT -8
Between the falling price of oil and the sanctions the West has in place over Ukraine and the Crimea brother Vlad is coming up short of the funds he needs for the day to day operation of his government let alone the military expansion he has undertaken.
Some of the economic types I've heard lately are saying it will be some time before the price of oil starts rising appreciably, maybe. It certainly will stay low only as long as there is a glut in the market but I think this won't last more than a few months (just my estimate.) Part of the reason is because of increased production here in the States and in Canada, but the cost per barrel of production at the moment is HIGHER than the per barrel market price. We are going to see rate of new production fall off sharply here and in Canada.
The Keystone pipeline, when it comes on line will help with those costs just a bit, but until the price per barrel of oil comes back up over $60 to $70 and stabilizes the exploration companies won't be doing much more exploration or drilling production wells.
Comrade Vladimir needs to get used to the idea that he won't be selling Siberian oil for over $100 per barrel again anytime soon.
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Post by warrior1972 on Dec 16, 2014 15:53:42 GMT -8
I agree.
However, if it gets bad enough, the Russians (or one of their more unsavory proxies-they still have them) may try to "engineer" something to artificially raise the price of oil.
Watch for it. I know I will.
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Post by warrior1972 on Dec 16, 2014 17:25:23 GMT -8
PUTIN'S WOES ABOUT TO GET WORSE CNN) -- What would you do if you were Vladimir Putin? What would you do if you were a Russian citizen? Russia's economic problems -- slowly incubating in recent months -- are about to get a lot worse. And that should make all of us nervous. The stomach-turning free fall of the ruble, the Russian currency, revealed the impending crisis. It may seem like a matter of economics, but at this level it is about politics, and when it comes to Putin, politics does not stop at the Russian border. Putin will try to blame Russia's problems on the West. He will work to bolster support at home, rally the public by making Russians feel besieged by the outside world, mostly by the United States and its NATO allies. That could end up creating even more dangerous tensions between Moscow and Washington, between Russia and the West. And Putin has shown he is not afraid of using every instrument of power, including his military forces, to achieve his goals. The walls are closing in on Putin's Russia. The spectacular collapse in global oil prices has led to an even more dramatic crumbling of the Russian currency, all of it coming at the same time as economic sanctions the West had imposed after Putin's forces captured Crimea, legally part of Ukraine, and stoked a separatist war between pro-Russian Ukrainians and the central government in Kiev. www.cnn.com/2014/12/16/opinion/ghitis-putin-ruble/index.html?hpt=hp_t3 |
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Post by warrior1972 on Dec 16, 2014 17:32:54 GMT -8
RUSSIA'S SHOCK AND AWE MOVE...WHAT NOW? In a dramatic overnight move, the Bank of Russia hiked interest rates for a sixth time this year -- to 17% from 10.5% -- but the gamble failed, and the ruble plunged further Tuesday. It's now lost about 57% of its value versus the U.S. dollar since the start of the year. There appear to be few options left for policymakers who are trying to staunch the bleeding, and none of them are particularly attractive. money.cnn.com/2014/12/16/news/economy/russia-ruble-collapse-options/index.html?hpt=hp_t2&hpt=hp_inthenews |
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Post by Sailor on Dec 16, 2014 18:17:31 GMT -8
I agree. However, if it gets bad enough, the Russians (or one of their more unsavory proxies-they still have them) may try to "engineer" something to artificially raise the price of oil. Watch for it. I know I will. It would not surprise me in the least shipmate. |
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Post by 101ABN on Dec 17, 2014 21:33:37 GMT -8
He'll move because he has to.
The only question is where and when.
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