Buy Roubles! Oil and gas prices will come back and when they do they will stay high for decades. Pretty soon Prime Minister Putin will have to worry about the Rouble becoming too strong. Mr. Putin and his advisors know this. Don't worry. Good times are on the way for Russia. -- REG CROWDER, Freelance Financial and Investment Writer (Europe)
It is my personal belief that the current trade price in crude is nothing more than an attempt to exacerbate the economic downturn in countries such as Russia. I would read very much between the lines of the very good speech Mr.Putin made at DAVOS in which he stated his position quite clearly, and more importantly he said what most already know. The US dollars day as the world reserve currency is over, anyone considering buying dollars at this stage would be crazy. I'll make a further assertion, the recent visit by Hilary Clinton to China shows without doubt that the dollar is in serious trouble. It is now wholly reliant on China continuing to buy treasury paper. If for example Russia backed it's rouble with gold, have you considered the effect this would have on fiat currencies?
Invest in Roubles now that the price of oil is just $35.
In three years the price of OIL will reach over $100 again as oil output is near its peak according to de Margerie, chief executive of Total (Financial Times, Feb. 15 2009)
So in the midterm price of oil is going up and that means price of the Rouble will go up too.
If we add the infraestructure investmen being undertaken in the Russian Federation (Sochi, Vladivostok, high speed train) and the low level of debt of the Russian economy (Public Debt is just 6% of GDP compared to over 170% in Japan and over 60% in the U.S.) then there is room for growth.
Not less important is the fact that the Russian economy is the only one profiting from Global Warming as millions of hectares of land are becoming arable.
Do not be naive. Mr. Putin has no control over the price of oil, which is essentially the only Russian money-maker. As goes the price of oil...so goes Russia.
Putin is helpless...in fact he appears to be trying to close the doors on foreign import and subsidize export. That is called desperation.
I have shorted the Ruble and RSX all the way down and made a lot of money. I will now begin buying again in a very small, measured manner. I have to believe Russia is close to a bottmo. I just hope it doesn't fall off the edge like in the past.
In the meanwhile, I would get into the dollar and euro if I was an everyday Russian. There is reason to be scared.
I would like to clarify that I am an American, but I am not against any people (although there are many governments of nations that are questionable to say the least). I wish well for the everyday Russian people.
My fear is that a desperate Putin can be erratic...and oil will be nowhere near where it was for quite some time. It will head back up by the end of the year, but oil producing nations can pretty much forget about anything over $100/barrell for some time.
My money is on Mr. Putin. I am not am economist and most probably not qualified to comment. The Americans and British cause trouble and then demand that the rest of the world must help them out of trouble. Iraq, Afganistan and now the world financial crisis. Let them stew in their hypocrosy. I say, dump the dollar and the British Pound. The Rouble should be the primary currency with China and South America following. Limit the freedom of Americans,British and their NGO's in Russia. If one looks at world leaders, United Nations, World Bank and the WTO,they are all weaklings bowing to the American filth and who once again cause trouble wherever they go, it is easy to see that Mr. Putin is the only true leader. A very cleaver man. I believe that Russia will eventually be in control and solve this problem on his terms.
Actually its like this - The Ruble rises when Commodity prices rise... The Commodity prices rise as & when World Economy improves and thus more demand for commodities is there... There as and when World Economic condition improves Ruble goes up again
Therefore those who are optimistic will buy Rubles, pessimists will sell...
What the world needs to do is to go back to sound money and forget all the fiat fantasy paper money. A world currency of gold and silver I agree but not a wolrd currency produced by a damn central banker that will control us all! Gold and silver will limit everyone's armies greatly since they wont be able to be supported due to the shortage of the commodities. Gold and silver will be the end for all central bankers. Those countries that dont have gold or silver could back their currencies with other limited universally valuable commodities.
The weak Ruble is not a true reflection of the state of Russia, the underlying problem is a broken dollar and the dynamics are complex, the dollar is currently way over valued.
Whatever you do, don’t do something silly like put your whole pension into the dollar, it’s very likely that you wont get back 2c on the dollar later. This is not the same thing that you had before; this is very different!
There are strong rumors on the web that the USA will introduce the Amero, because the dollar is in so much trouble.
If Russians panic, this is what will happen, you all rush out and buy dollars, that then weakens the Ruble even more, which makes life tougher at home, it make everything worse and more expensive. Rather buy Russian gold bars or Russian gold coins, that will keep its value, and it helps inflation. The problem now is that money all over the world is broken, not just Russia, no currency is safe! In fact what seems to be happening is that pretty soon, only the currency of a country will work in that country. These bankers now don’t trust each other at all, and the world is islanding! Yes, I know, they too stupid to fix it, and that’s the real problem. In Russia, its Ruble, or Gold… there is no other choice. The Yen is taking off, but that wont last either. Only buy something you can touch and hold.
It is a war, it could well be a bloodless war, but there are going to be a great many casualties on a global scale. It’s a war between those that want to control money and those that want to emancipate money. Those fighting for the liberation of money, a currency by the planet for the planet, will win, because the truth is on our side, nothing more than honesty is enough to recruit soldiers on this march to our last final freedom. If good men start the BRIC by nations, for nations, we not only gives ourselves a lifeline, we give countries with two heads a way to choose morality over servitude and eliminate their evil twin, a disease now very apparent in the USA. Remember that no good man can win, unless you have give him another life jacket, because his war is with the very vessel that now carries him. If Obama is for real, and you don’t help him, do not be surprised if he is defeated, he becomes his enemy, and the devil then knocks on your door.
The Pound Sterling has fallen even more than the Rouble, about 30% during the last year.
And there is a clear difference between the Rouble and the Pound:
a) The Pound is next to the Eurozone and attracted by the gravity of the Euro.
b) The UK now imports an increasing quantity of oil when it used even to export oil from the North Sea. Experts agree that in a couple of years oil price will increase again because it is becoming an scarce resource and as a consequence of some, even if weak, economic recovery.
So the ones keeping Roubles now will be better placed when the price of the Rouble starts rising again...
We don’t need the dollar, we need the BRIC and we don’t care if Europe or the USA doesn’t honor it, we buy nothing from them! We do send them taxes and pension funds that are now absolutely worthless!
Let me try making this very simple, if your BRIC currency is not ready in 3 months time, you have LOST. Do you understand that at this level the BRIC is not financed by the dollar it’s nothing more than a journal entry that countries will honor! What are you waiting for, you missing the biggest opportunity ever, you are sleeping!
Here’s an example, in my country the finance minister is already going from, “we are the third best banking system in the world, and we are immune, to oh sherbit herbit, we are in deep do-do”. Now because your BRIC is not ready, we have no other choice, we have to refinance and in effect we now bail out the crooked bankers that did this to us. If you make the BRIC after that, too late she cried! Ask yourself why the Arabs are all procrastinating over the crisis, yes because you have not given them an alternative, there is no BRIC! Damn, I wish I were running China, I’d have a complete new clean alternate global financial system running already. They are buying time, and you are losing, cant you see that! You are losing! You have not given the world a choice, bad mistake!
The more I watch this crazy world starting to pull itself apart, the more I know that the greatest gift the BRIC’s could give humanity, is a new honest transparent uncontaminated global reserve currency. I don’t think humanity will make it without one.
Further to comment on possibilities of joint initiatives between the USA and China to stabilise world financial and economic conditions, it seems necessary to observe that many people do not seem to know that the USA does not to this day regard the government in Beijing as the legal government of China. When President Nixon made his historic visit in 1972, he only recognised them as de facto the government, and the USA took another seven years actually to send an ambassador to Beijing (who happened to be President George HW Bush as he was to be). This is also necessarily the case as large forces are stationed by the USA in Taiwan, regarded by Beijing as a "rebel province", which are only there legally because the "rebels" are recognised by the USA and various other nations around the world as the legal government of the whole of China!! Of course we are waiting and waiting for initiatives of the kind suggested by your previous correspondent Johnny, but not hearing anything, and it would seem that under the circumstances outlined above, it will be a long time in the making!! But I would not want to discourage people from working and hoping for it.
I know every country has its own problems due to this global down turn but as this a forum about Russia lets look at some of the problems this country faces now and in the future.
Russia has an economy that is commodities driven (66% oil/gas) Medvedev stated this himself only a few days ago. Russia has set a budget for next year that is based on oil priced at $95 currently the price is $45 even with OPEC cutting production the price is unlikely to go beyond $60.Russia will have to use its stabilisation fund to meet its budget commitments for 2009.
Russia has already cut production by 300 thousand barrels a day this is not a planned effort to help prices but based on the fact that many of its oil field are not economically viable if the price falls below a certain level ($70) and have already stopped pumping.
I think that the current process is just about right. It is a good idea to let it slide a little, as it discourages imports and helps exports -- exactly the kind of stimulus needed at this time. So far, all the moves of the government look really good. They are now cleaning up the last vestiges of Jeltsinizm, as the followers of the liberal capitalism sect got themselves overextended. The funds set up for selective bailouts will remedy that, if called for. No, I cannot find a fault with the moves of the government yet. Much of the problem seems to be with the prophets of doom and gloom. All those that are hoping to see Russian economy hit, are out praying with shamans, and reading the enthrails of a pig. But those who hope for the end of the world, may really unnerve the public. The idiocy of buying dollars at this time, is mindbogling. The short-term boost is caused by the biggest margin call in history, and the resulting repatriation of dollar, shooting up the demand. Hope these folks will not hold the dollars for too long, though. As it is evident already from the several weeks data, that the reserves are being increased. Still, the "rainy day fund" is diminished by only one third, and that is reasonable. The development fund is not impared, and with the exception of car industry, Russia does not have much production that is very exposed to the consumer purchase contraction. So, all is well, even though in reading papers such as the British Economist, or FT, you would really get the wrong impression. If the Russian GDP growth will be impared next year, that will be a picnic compared to the negative growth in US, Japan and most EU countries. In Italy, the debt is 104% of GDP, and in US the foreign debt is at nearly 12 trillion dollars, while GDP officially stood at 14 trillion. However, the elimination of paper wealth both in banking and the stock market, will definitely bring GDP bellow 14 trillion. However, with ALL obligations counted, the debt is really 54 trillion. Even though US has the advantage that the dollar is the reserve currency, so it does not have to cover its deficits with exports --- too much is still too much. Russia by comparison has no government debt, has mutiple currency and gold reserves, and the exports that are not too dependent on US consumer. Raw materials are fungible, and will find markets in many world's economies, as the era of easy finished product imports may be over for many countries and for a foreseeable future.
14 March, 2009, 19:39
Buy Roubles! Oil and gas prices will come back and when they do they will stay high for decades. Pretty soon Prime Minister Putin will have to worry about the Rouble becoming too strong. Mr. Putin and his advisors know this. Don't worry. Good times are on the way for Russia. -- REG CROWDER, Freelance Financial and Investment Writer (Europe)
23 February, 2009, 22:18
It is my personal belief that the current trade price in crude is nothing more than an attempt to exacerbate the economic downturn in countries such as Russia. I would read very much between the lines of the very good speech Mr.Putin made at DAVOS in which he stated his position quite clearly, and more importantly he said what most already know. The US dollars day as the world reserve currency is over, anyone considering buying dollars at this stage would be crazy.
I'll make a further assertion, the recent visit by Hilary Clinton to China shows without doubt that the dollar is in serious trouble. It is now wholly reliant on China continuing to buy treasury paper.
If for example Russia backed it's rouble with gold, have you considered the effect this would have on fiat currencies?
16 February, 2009, 02:01
Invest in Roubles now that the price of oil is just $35.
In three years the price of OIL will reach over $100 again as oil output is near its peak according to de Margerie, chief executive of Total (Financial Times, Feb. 15 2009)
So in the midterm price of oil is going up and that means price of the Rouble will go up too.
If we add the infraestructure investmen being undertaken in the Russian Federation (Sochi, Vladivostok, high speed train) and the low level of debt of the Russian economy (Public Debt is just 6% of GDP compared to over 170% in Japan and over 60% in the U.S.) then there is room for growth.
Not less important is the fact that the Russian economy is the only one profiting from Global Warming as millions of hectares of land are becoming arable.
07 February, 2009, 15:52
Michael,
Do not be naive. Mr. Putin has no control over the price of oil, which is essentially the only Russian money-maker. As goes the price of oil...so goes Russia.
Putin is helpless...in fact he appears to be trying to close the doors on foreign import and subsidize export. That is called desperation.
I have shorted the Ruble and RSX all the way down and made a lot of money. I will now begin buying again in a very small, measured manner. I have to believe Russia is close to a bottmo. I just hope it doesn't fall off the edge like in the past.
In the meanwhile, I would get into the dollar and euro if I was an everyday Russian. There is reason to be scared.
I would like to clarify that I am an American, but I am not against any people (although there are many governments of nations that are questionable to say the least). I wish well for the everyday Russian people.
My fear is that a desperate Putin can be erratic...and oil will be nowhere near where it was for quite some time. It will head back up by the end of the year, but oil producing nations can pretty much forget about anything over $100/barrell for some time.
30 January, 2009, 11:41
My money is on Mr. Putin.
I am not am economist and most probably not qualified to comment. The Americans and British cause trouble and then demand that the rest of the world must help them out of trouble. Iraq, Afganistan and now the world financial crisis. Let them stew in their hypocrosy.
I say, dump the dollar and the British Pound. The Rouble should be the primary currency with China and South America following. Limit the freedom of Americans,British and their NGO's in Russia. If one looks at world leaders, United Nations, World Bank and the WTO,they are all weaklings bowing to the American filth and who once again cause trouble wherever they go, it is easy to see that Mr. Putin is the only true leader. A very cleaver man.
I believe that Russia will eventually be in control and solve this problem on his terms.
24 January, 2009, 18:53
Actually its like this -
The Ruble rises when Commodity prices rise...
The Commodity prices rise as & when World Economy improves and thus more demand for commodities is there...
There as and when World Economic condition improves Ruble goes up again
Therefore those who are optimistic will buy Rubles, pessimists will sell...
Its as simple as that!
24 January, 2009, 03:59
What the world needs to do is to go back to sound money and forget all the fiat fantasy paper money. A world currency of gold and silver I agree but not a wolrd currency produced by a damn central banker that will control us all!
Gold and silver will limit everyone's armies greatly since they wont be able to be supported due to the shortage of the commodities. Gold and silver will be the end for all central bankers. Those countries that dont have gold or silver could back their currencies with other limited universally valuable commodities.
23 January, 2009, 12:00
No, don’t buy dollars!
The weak Ruble is not a true reflection of the state of Russia, the underlying problem is a broken dollar and the dynamics are complex, the dollar is currently way over valued.
Whatever you do, don’t do something silly like put your whole pension into the dollar, it’s very likely that you wont get back 2c on the dollar later.
This is not the same thing that you had before; this is very different!
There are strong rumors on the web that the USA will introduce the Amero, because the dollar is in so much trouble.
If Russians panic, this is what will happen, you all rush out and buy dollars, that then weakens the Ruble even more, which makes life tougher at home, it make everything worse and more expensive.
Rather buy Russian gold bars or Russian gold coins, that will keep its value, and it helps inflation.
The problem now is that money all over the world is broken, not just Russia, no currency is safe!
In fact what seems to be happening is that pretty soon, only the currency of a country will work in that country.
These bankers now don’t trust each other at all, and the world is islanding!
Yes, I know, they too stupid to fix it, and that’s the real problem.
In Russia, its Ruble, or Gold… there is no other choice. The Yen is taking off, but that wont last either. Only buy something you can touch and hold.
21 January, 2009, 11:49
It is a war, it could well be a bloodless war, but there are going to be a great many casualties on a global scale.
It’s a war between those that want to control money and those that want to emancipate money.
Those fighting for the liberation of money, a currency by the planet for the planet, will win, because the truth is on our side, nothing more than honesty is enough to recruit soldiers on this march to our last final freedom.
If good men start the BRIC by nations, for nations, we not only gives ourselves a lifeline, we give countries with two heads a way to choose morality over servitude and eliminate their evil twin, a disease now very apparent in the USA.
Remember that no good man can win, unless you have give him another life jacket, because his war is with the very vessel that now carries him.
If Obama is for real, and you don’t help him, do not be surprised if he is defeated, he becomes his enemy, and the devil then knocks on your door.
20 January, 2009, 23:40
correction:
"The ones keeping Rubles will be better placed when the price of OIL starts rising again"
20 January, 2009, 03:27
John,
The Pound Sterling has fallen even more than the Rouble, about 30% during the last year.
And there is a clear difference between the Rouble and the Pound:
a) The Pound is next to the Eurozone and attracted by the gravity of the Euro.
b) The UK now imports an increasing quantity of oil when it used even to export oil from the North Sea. Experts agree that in a couple of years oil price will increase again because it is becoming an scarce resource and as a consequence of some, even if weak, economic recovery.
So the ones keeping Roubles now will be better placed when the price of the Rouble starts rising again...
17 January, 2009, 14:39
I can't believe no one has posted on this issue since January 5th!!!
Is anyone watching the continuous and incremental devaluation of the Ruble by the Russian government???
SELL YOUR RUBLES!!!
You have to exchange them for dollars or euros. Take a look at the receent Ruble value in detail and you will throw up your breakfast.
16 January, 2009, 14:08
We don’t need the dollar, we need the BRIC and we don’t care if Europe or the USA doesn’t honor it, we buy nothing from them!
We do send them taxes and pension funds that are now absolutely worthless!
Give the world the BRIC!
The BRICs are sleeping!
16 January, 2009, 13:43
Let me try making this very simple, if your BRIC currency is not ready in 3 months time, you have LOST.
Do you understand that at this level the BRIC is not financed by the dollar it’s nothing more than a journal entry that countries will honor!
What are you waiting for, you missing the biggest opportunity ever, you are sleeping!
Here’s an example, in my country the finance minister is already going from, “we are the third best banking system in the world, and we are immune, to oh sherbit herbit, we are in deep do-do”.
Now because your BRIC is not ready, we have no other choice, we have to refinance and in effect we now bail out the crooked bankers that did this to us.
If you make the BRIC after that, too late she cried!
Ask yourself why the Arabs are all procrastinating over the crisis, yes because you have not given them an alternative, there is no BRIC!
Damn, I wish I were running China, I’d have a complete new clean alternate global financial system running already.
They are buying time, and you are losing, cant you see that!
You are losing! You have not given the world a choice, bad mistake!
05 January, 2009, 06:20
The more I watch this crazy world starting to pull itself apart, the more I know that the greatest gift the BRIC’s could give humanity, is a new honest transparent uncontaminated global reserve currency.
I don’t think humanity will make it without one.
21 December, 2008, 05:29
It
20 December, 2008, 11:13
Further to comment on possibilities of joint initiatives between the USA and China to stabilise world financial and economic conditions, it seems necessary to observe that many people do not seem to know that the USA does not to this day regard the government in Beijing as the legal government of China. When President Nixon made his historic visit in 1972, he only recognised them as de facto the government, and the USA took another seven years actually to send an ambassador to Beijing (who happened to be President George HW Bush as he was to be). This is also necessarily the case as large forces are stationed by the USA in Taiwan, regarded by Beijing as a "rebel province", which are only there legally because the "rebels" are recognised by the USA and various other nations around the world as the legal government of the whole of China!! Of course we are waiting and waiting for initiatives of the kind suggested by your previous correspondent Johnny, but not hearing anything, and it would seem that under the circumstances outlined above, it will be a long time in the making!! But I would not want to discourage people from working and hoping for it.
18 December, 2008, 15:40
Hi Bianca,
I agree with your assessment, Russia does seem to be following excellent policy, in very hard times.
I can
18 December, 2008, 12:27
I know every country has its own problems due to this global down turn but as this a forum about Russia lets look at some of the problems this country faces now and in the future.
Russia has an economy that is commodities driven (66% oil/gas) Medvedev stated this himself only a few days ago. Russia has set a budget for next year that is based on oil priced at $95 currently the price is $45 even with OPEC cutting production the price is unlikely to go beyond $60.Russia will have to use its stabilisation fund to meet its budget commitments for 2009.
Russia has already cut production by 300 thousand barrels a day this is not a planned effort to help prices but based on the fact that many of its oil field are not economically viable if the price falls below a certain level ($70) and have already stopped pumping.
Most of Russia
18 December, 2008, 05:30
I think that the current process is just about right. It is a good idea to let it slide a little, as it discourages imports and helps exports -- exactly the kind of stimulus needed at this time. So far, all the moves of the government look really good. They are now cleaning up the last vestiges of Jeltsinizm, as the followers of the liberal capitalism sect got themselves overextended. The funds set up for selective bailouts will remedy that, if called for. No, I cannot find a fault with the moves of the government yet.
Much of the problem seems to be with the prophets of doom and gloom. All those that are hoping to see Russian economy hit, are out praying with shamans, and reading the enthrails of a pig. But those who hope for the end of the world, may really unnerve the public. The idiocy of buying dollars at this time, is mindbogling. The short-term boost is caused by the biggest margin call in history, and the resulting repatriation of dollar, shooting up the demand. Hope these folks will not hold the dollars for too long, though. As it is evident already from the several weeks data, that the reserves are being increased. Still, the "rainy day fund" is diminished by only one third, and that is reasonable. The development fund is not impared, and with the exception of car industry, Russia does not have much production that is very exposed to the consumer purchase contraction. So, all is well, even though in reading papers such as the British Economist, or FT, you would really get the wrong impression. If the Russian GDP growth will be impared next year, that will be a picnic compared to the negative growth in US, Japan and most EU countries. In Italy, the debt is 104% of GDP, and in US the foreign debt is at nearly 12 trillion dollars, while GDP officially stood at 14 trillion. However, the elimination of paper wealth both in banking and the stock market, will definitely bring GDP bellow 14 trillion. However, with ALL obligations counted, the debt is really 54 trillion. Even though US has the advantage that the dollar is the reserve currency, so it does not have to cover its deficits with exports --- too much is still too much. Russia by comparison has no government debt, has mutiple currency and gold reserves, and the exports that are not too dependent on US consumer. Raw materials are fungible, and will find markets in many world's economies, as the era of easy finished product imports may be over for many countries and for a foreseeable future.
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