# Russia interest rate jumped from 10.5 to 17 percent today



## Underworld (Aug 26, 2009)

Wow. Just saw that Russia's interest rates had jumped from 10.5% to 17% today.
Imagine your mortgage coming up for renewal after that!


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## GoldStone (Mar 6, 2011)

Mr. Putin learns the lesson: currency markets are stronger than tanks and rockets.


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## Fraser19 (Aug 23, 2013)

That would just be such a massive level of devastation in Canada.


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## AltaRed (Jun 8, 2009)

Canada just about hit the wall circa 1993 with its unmanageable debt-to-GDP ratio. Had Chretien/Martin not put the binders on, we'd been worse than the Mexican peso. 

http://www.canadianforex.ca/forex-tools/historical-rate-tools/yearly-average-rates 

It took 10 additional years to halt the slide of the loonie and I remember it well since 1990 to 2006 were my peak investment/savings years. In Russia's case, it could quickly recover if there is an early rebound in oil price but if they get to the point of defaulting on their debt as they did circa 1998?, all bets are off.


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## HaroldCrump (Jun 10, 2009)

Mortgages aren't such a big problem in Russia, regardless of these rate increases.
To begin with, there were lots of structural reforms by privatizing social housing after the Soviet Union collapse.
Therefore, home ownership rates were higher going into the market reform years.
Secondly, mortgage rates were _always_ higher in Russia, therefore, it is unusual for people to have the kind of large mortgages that people in North America have (5X times gross income, 30 year amortized mortgages, for instance).

Yields of 17% are of course terrible for everyone...but not entirely unexpected given what's going on.


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## Janus (Oct 23, 2013)

The currency is still collapsing - Crimea will be the only place Russians can vacation for a long while. Hope it was worth it.


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## yyz (Aug 11, 2013)

All in on a Russian 5 year GIC?


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## HaroldCrump (Jun 10, 2009)

This is clearly a run on the Ruble.
There are reports of people lining up to withdraw Euros from Russian banks.
At this rate, capital controls, bail-ins, and forex withdrawal restrictions are coming very soon, possibly within a matter of days.

Remember these images from another time & place?


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## Nemo2 (Mar 1, 2012)

^ Yup the old Weimar Republic.......and the folklore tale about a person putting down a wicker basket full of banknotes and having someone empty out the money and steal the basket............makes one realize what a house of cards is being built.


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## HaroldCrump (Jun 10, 2009)

HaroldCrump said:


> The US sees Russia's capitulation imminent.


This is unraveling faster than expected. My post above was just over 1 month ago.

However, at the same time let's keep in mind what Russia has been doing in the Gold market, as I had explained in that post linked above.










Putin is an unconventional and eccentric leader.
The Chairwoman of the CBR is also a very smart individual.

It is possible that if they are completely losing control of the economy, they could scrap the Ruble (it is becoming worthless fast anyway), create a new currency, and back it with gold (partially, of course, they don't have enough gold just yet).

I don't know if/when that will happen.
I don't think they have enough gold to make such a move right now.


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## Underworld (Aug 26, 2009)

I've been watching lots on YouTube (Mike Maloney) lately regarding:
+ All countries are now Fiat currency (I don't believe there is one backed by gold any more except the new Islamic State proposal)
+ During Breton Woods - how all countries chose to be backed by us dollars as the US had the largest reserve protected by a lot of nuclear weapons

Russia does have a crap load of nukes. Russia has a building stock pile of gold. I see countries like China becoming Bros with Russia and trying to arms length themselves from the US Dollar. I wonder if they could swap to being gold backed? 

I wonder what impacts Gold being priced in USD would have on that scenario? America are in a very fortunate position of being able to print money to buy Gold and import oil for free! Lucky them


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## Sasquatch (Jan 28, 2012)

HaroldCrump said:


> This is clearly a run on the Ruble.
> There are reports of people lining up to withdraw Euros from Russian banks.
> At this rate, capital controls, bail-ins, and forex withdrawal restrictions are coming very soon, possibly within a matter of days.
> 
> Remember these images from another time & place?


Growing up in Germany I remember my grandmother telling me of my grandfather getting paid twice a day in cash, where he needed a laundry basket to bring it home. A loaf of bread that cost 5 million marks today, went for 6 million the next day. No wonder my grand parents never trusted their money to any banks when I was a kid. Whatever little money they had after the war was hidden in their apartment.


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## andrewf (Mar 1, 2010)

Makes Russian threats to stop selling gas to Europe ring especially hollow. Russia is in an awful position. Gold reserves will help them keep the lights on--not the basis for a new currency.


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## lonewolf (Jun 12, 2012)

Underworld said:


> I've been watching lots on YouTube (Mike Maloney) lately regarding:
> + All countries are now Fiat currency (I don't believe there is one backed by gold any more except the new Islamic State proposal)
> + During Breton Woods - how all countries chose to be backed by us dollars as the US had the largest reserve protected by a lot of nuclear weapons
> 
> ...


 I think it was Ecuador that went to a Crypto currency similar to the Bitcoin. Governments destroys the money world so it probably is not set up as good as the bitcoin


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## passivedividends (Dec 16, 2014)

Currently reading a new book, Colder War by Marin Katusa. Fascinating read so far, discusses the motivation of Putin with their control and quest of oil and other energy markets. Marin is really great at embedded his opinions in a well thought out story.

http://amzn.to/1uS3mkz


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## bettrave (Jan 10, 2013)

*Russia at 17%!*

Hi,

Is there a way to benefit from this lovely 17% rate in Russia?


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## GoldStone (Mar 6, 2011)

Why settle for a piddly 17% a year when you can do so much better.

You can day trade RUSL - Russia 3X Bull ETF. 

Yesterday, you could have done this:

09:45AM: buy @ $1.75
11:45AM: sell @ $2.80

60% return in two hours.


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## Underworld (Aug 26, 2009)

Nice example GoldStone!


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## lonewolf (Jun 12, 2012)

This is not good if the Ruble fall was engineered as an act of war by the wall street bankers. If the bankers have this kind of war power no wonder why they are seldom prosecuted for market manipulation. The powers that be might think its in the countries best interest to let the bankers steal from its citizens in exchange for national security of the powers of financial warfare .


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## HaroldCrump (Jun 10, 2009)

I don't think this was engineered by the Wall St. bankers unilaterally, without sponsorship, support, and blessing of the US administration.
I have said before that I believe this was engineered by the US administration in association with Saudi Arabia.
The Wall St. banks are simply carrying out their marching orders.


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## gibor365 (Apr 1, 2011)

HaroldCrump said:


> I don't think this was engineered by the Wall St. bankers unilaterally, without sponsorship, support, and blessing of the US administration.


In any case everything was engineered by US... but those are dangerous "games"....


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## Toronto.gal (Jan 8, 2010)

Putin is/was also playing dangerous games.


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## gibor365 (Apr 1, 2011)

Putin just wants Russia to be independent country and not to follow orders from White House...


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## Toronto.gal (Jan 8, 2010)

Speaking of Putin, 'the saviour of Russia.'
http://www.cbc.ca/fifth/episodes/2014-2015/putins-long-shadow


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## gibor365 (Apr 1, 2011)

Toronto.gal said:


> Speaking of Putin, 'the saviour of Russia.'
> http://www.cbc.ca/fifth/episodes/2014-2015/putins-long-shadow


Such articles and programs remind me about articles in "Pravda" during CCCP  Somebody wants to revive neo-cold-war...



> raises disturbing questions about the role the Russian security services played in four apartment building bombings in Moscow


here we go :stupid: 
Interesting that Russian serious media doesn't discuss that 9/11 was organized by US government .... only Americans by themselves doing it, like "9/11 Truth movement" or Charlie Sheen....


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