Russia's ruble worth less than 1 cent after West tightens sanctions

[nang2]

Could you point out WHEN Canadian dollar fell 30% in a single day ????
No doubt since you make this claim you can provide the evidence.

Does it matter between 30% in a single day and in 30 days? It is not like ruble is dropping 30% every day.

 

[Wood]

The real value of a currency is its stability. It is after all our trust in the value of currency that gives it value in the first place. The fact that some people dismiss precipitous drop of 30% as not a problem shows that there is a fundamental gap in their basic understanding of money.

Does it matter between 30% in a single day and in 30 days? It is not like ruble is dropping 30% every day.

Yes it does. Very much so

 

[nang2]

The real value of a currency is its stability. It is after all our trust in the value of currency that gives it value in the first place. The fact that some people dismiss precipitous drop of 30% as not a problem shows that there is a fundamental gap in their basic understanding of money.


Yes it does. Very much so

Actually, short and quick fall is preferred by people in the market. Long and slow fall is not because it is more difficult to sense if it has hit the bottom. Anyone who wants to buy low is running a risk of catching a falling knife.

 

[Wood]

Actually, short and quick fall is preferred by people in the market. Long and slow fall is not because it is more difficult to sense if it has hit the bottom. Anyone who wants to buy low is running a risk of catching a falling knife.

Yea, tell that to the average salaried man who has his bank deposits slashed by 30% in value. Besides, Russia is indeed looking at a prolonged slide in currency value given the nature of sanctions that have been imposed.

 

[nang2]

Yea, tell that to the average salaried man who has his bank deposits slashed by 30% in value. Besides, Russia is indeed looking at a prolonged slide in currency value given the nature of sanctions that have been imposed.

Average salaried man only pays his grocery with rubles, not US dollars. As I have said before, the exchange rate is only affecting foreign trade. How much foreign trade is affecting an average salaried man in Russia?

 

[Wood]

Average salaried man only pays his grocery with rubles, not US dollars. As I have said before, the exchange rate is only affecting foreign trade. How much foreign trade is affecting an average salaried man in Russia?

So this will not affect the price of goods in the country?

 

[nang2]

So this will not affect the price of goods in the country?

It will, but won't be 30% hike.

 

[Wood]

It will, but won't be 30% hike.

It is estimated to start at 5% on top of existing 9%. It will eventually catch up to currency value. Given that the sanctions are likely to stick around, I'll expect more depreciation to come.

 

[beijingwalker]

This will also send US inflation through the roof, both Russia and US will suffer big time. US now acts like a chicken running around with its head cut off forgetting its priorities.

 

[gambit]

The real value of a currency is its stability. It is after all our trust in the value of currency that gives it value in the first place. The fact that some people dismiss precipitous drop of 30% as not a problem shows that there is a fundamental gap in their basic understanding of money.

You got a bunch of guys who can barely balance a checkbook, using some old financial language but the the idea is still the same, but here they are telling the world they know how to solve international finance and trade problems.

 

[nang2]

It is estimated to start at 5% on top of existing 9%. It will eventually catch up to currency value. Given that the sanctions are likely to stick around, I'll expect more depreciation to come.

Considering US inflation is at 15% based on the same algorithm used in 80s, doesn't sound too alarming.

 

[A1Kaid]

They have over $640bn in foreign currency reserves, gold, and other things. Also Europe is still paying Russia $1bn (rough estimate) a day for oil. I think they'll be fine for some time. Passing sanctions on a country cuts both ways.

 

[Wood]

Considering US inflation is at 15% based on the same algorithm used in 80s, doesn't sound too alarming.

US retains the tools to manage its monetary policy. Russian Central Bank is sanctioned. Their chief banker has said that their war chest is inaccessible for currency manipulation. But sure, this is not alarming at all

 

[nang2]

US retains the tools to manage its monetary policy. Russian Central Bank is sanctioned. Their chief banker has said that their war chest is inaccessible for currency manipulation. But sure, this is not alarming at all

It is more alarming to me that now US has less incentive to rein in its own inflation. I think ruble is fine as long as their central bank doesn't start printing.

 

[Wood]

It is more alarming to me that now US has less incentive to rein in its own inflation. I think ruble is fine as long as their central bank doesn't start printing.

If I can speculate Ruble with any confidence, then I'll put my money on it. But if the sanctions continue to escalate into energy realm, then I find it hard to believe that Russia can balance its budget. Money printing will become necessary then. Time will tell