Russian Currency Watch: Ruble Update

The ruble is crumbling. Speculators will put the government's resolve to defend the ruble to the ultimate test. Look for 36.20/30 as a critical barrier; if it is breached, Europe will be an ugly place today.

Got the popcorn and watching the Bloomberg screen tick for tick - memories of Soros storming the pound. Exciting stuff (click on chart to enlarge).

Comments

[notsosmart:]

its tough enough here.why would anyone want to bother with russia.russia & china are dictatorships.they will move the goalposts anytime.

Feb 10 08:37 AM

[Ray Winter:]

Russia has limitless supplies of minerals, so they will be an ultimate winner, long after the US Dollar has been devalued at the rate of 10 USD to 1 new US currency. This devaluation is likely to occur when the Fed starts printing Treasuries to acquire all those toxic assets which signal the rest of the world to dump Dollars. The future will then begin to look very 16th Century.

Feb 10 09:00 AM

[Conan the B...:]

We are also bailing out the rest of the world at the same time, the Toxic assets are not a "One way" street. The US has Toxic assets overseas as well as here. The Fed has foreign exchange swaps of over $500 Billion with Europe, Europe has $400 Billion in loans to Russia. Russia Defaults, Europe Defaults, Kerplunk.

Western Financial Markets are joined at the Butt. The Eastern Bloc is in there as well.

Feb 10 09:11 AM

[DrZero:]

Which way I should be looking at the to break. Above or below the 36.20 level. I'm not a FOREX fellow, sorry. Can someone help me out with this. thx.

Feb 10 09:54 AM

[iyamwutiam:]

The US is so busy bailing out the World that it is over 12 Trillion dollars in debt. It has magnanimously decided to hold over 300 billion of Russian surplus, a trillion of Japanese and Chinese surplus in Treasuries to further 'bail out' these poor countries.

I totally agree - I feel the US should fore go all foreign ivestments and remove themselves from aiding foreign countries. After all- the US 'never' takes anything from the countries it aids- 'ever'.

This altruism by the US is getting out of hand. After all -we all know that USAID, IMF, WB etc are all institutions that have only the purest motivations and that the 'Washington' Consensus etc is only in the imagination of the ungrateful recipient countries.

Russia has a 100 billion dollar loan due and still possesses over 200billion dollars in surplus. Which we all know is much worse than the US -which has 12 trillion dollars in debt and no surplus. Any person can see that its obvious that Russia is the poorer country. The amount of debt you can take on and perpetuate is a fantastic indicator of your wealth and productive capacity- just ask Bear Stearns and Lehman.




On Feb 10 09:11 AM paultaut wrote:

> We are also bailing out the rest of the world at the same time, the
> Toxic assets are not a "One way" street. The US has Toxic assets
> overseas as well as here. The Fed has foreign exchange swaps of over
> $500 Billion with Europe, Europe has $400 Billion in loans to Russia.
> Russia Defaults, Europe Defaults, Kerplunk.
>
> Western Financial Markets are joined at the Butt. The Eastern Bloc
> is in there as well.

Feb 10 11:26 AM

[richard_nog...:]

The USG is going to find they cannot paper over this downturn, like they have in previous downturns. It is going to take hard currency, based on something of value to shore the dollar up

Feb 10 01:53 PM

[Conan the B...:]

iamwut: The USA shells out Billions around the world pushing our "Democratic" values.

Every year, same thing "please help us". We help.
Every year, once the help is given, Its Yankee go home.
Until...please help....

Time to stop that "same old, same old", its time for a change. IMO

Feb 10 02:37 PM

[Lynn:]

CelticSlav,
The author is saying if the ruble trades at more than 36.2 rubles per $1.00, which means it is falling in valuing, then it could fall off the cliff.

Russia has $110 billion in foreign debt coming due this year. The ruble's falling value will make it harder for Russia to meet those payments. If their debt gets downgraded then the currency will probably fall even further.

Feb 10 03:45 PM

[Alicia_Finance:]

No economy will escape the effects of the financial crunch..........

Feb 10 03:49 PM

[Urbane Gori...:]

Russia does have a healthy supply of mineral wealth. Unfortunately, it has a government that uses it as a weapon. There are too many other countries that have similar attributes that seem more inclined to work with what they have, such as Nigeria, Brazil, Chile, Australia, Canada, and even the USA for Russia to get too complacent. My gut feeling is that Russia needs to get it's financial house in order, get a handle on the Russian Mafia, develop a reasonable and functional legal system and crowbar politics from it's businesses before it is too late.

Just want to point out that I don't have an axe to grind, nor do I feel the US is that much better (although with Dubya gone, maybe we can clean up some of the messes he left behind), just have an opinion....

jegan


On Feb 10 09:00 AM Ray Winter wrote:

> Russia has limitless supplies of minerals, so they will be an ultimate
> winner, long after the US Dollar has been devalued at the rate of
> 10 USD to 1 new US currency. This devaluation is likely to occur
> when the Fed starts printing Treasuries to acquire all those toxic
> assets which signal the rest of the world to dump Dollars. The future
> will then begin to look very 16th Century.

Feb 10 05:09 PM