Putin’s warlords and oligarchs threaten coup as Ruble craters | My Times Ukraine Podcast | Diane Francis
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My Times Ukraine Podcast
https://dianefrancis.substack.com/p/my-times-ukraine-podcast
August 24, 2024
People have been predicting this since forever and it hasn't happened. Doesn't mean it never will, but I wouldn't hold my breath.
Perhaps the "correct" way to view the collapse of Russia is like the Ottoman empire. The ottomans fell apart in stages over 300 years, gradually losing direct control and influence over the hinterlands, then suddenly in quick, sharp wars against their former vassals in Africa and the Balkans. Eventually, they end up with a relatively small rump state in Turkey. I think that's possibly the most likely outcome with Moscow/St. Petersburg retaining a much reduced ethnic russian rump state and nearly everything else breaking away. But - the point is - it happens slowly, in stages, and in response to losing wars. Longer than single human lifetimes, so it makes it harder to recognize and comprehend until it's all over.
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I think the main factor to the collapse as well as to why it was taking this long was the speed of communication. Those vassals had the luxury of 10 messages a year from the boss.
Interestingly, when it comes to (hopefully soon) collapse of russia, there are two parts to it. First are the instant communication channels that are useful to the crash and second is the human hierarchy that pootin uses (and has to) to get information. So he's at the Ottoman speeds of processing information, but at the modern speed of attack.
Unfortunately dictators tend to be extremely resilient.
General Franco of Spain, dictator for 39 years, despite active opposition.
Muammar Gaddafi of Libya 42 years, and was forced out by foreign powers.
Kim Young Un has only been 12 years, but it was inherited from his father,and he is still reigning. His father was dictator of North Korea for 34 years, and it only ended because he died.
Some of the people around Putin may be hawks, but Putin have them all scared shitless.
I too hope they will get rid of him soon, and I'm pretty sure the oligarchs aren't happy, and most the politicians aren't either.
So if they can gather the courage, Putin could be out any moment.
How is it cratering? Sure, exchange rates are showing ups and downs over the past year, but it's not much more than a 10 USD spread.
https://www.google.com/finance/quote/USD-RUB?window=YTD
My recollection is that the ruble is restricted (partially/mostly?) from being traded by the Russian government. So, most of the ruble currency exchange is on the black market, which wouldn't be what Google finance shows.
I semi recall reading something a year or so ago about the black market ruble value being half of the publicized value, so maybe what she is referencing is a recent significant drop in the black market ruble value.
Yes it doesn't look that bad on the chart. But we have to remember Russia has done many things to stimulate the Ruble.
Having their oil trade in Ruble.
Heavily restricting buying foreign currencies.
Having double digit interest rates, central bank has 18% .
These are all very powerful measures to support the Ruble, and yet it's declining compared to before the war.
It's unknown to me if they have reduced liquidity of the Ruble too, but my guess from the collection of measures they have used, is that they have.
So all in all capital has become extremely expensive in Russia, and high inflation is eating the value too. And despite investments are nearly halted, the economy suffers heavy symptoms of overheating because of the war. Like really serious worker shortage.
I'm estimating (guessing) that on average, an ordinary household has probably lost around 20+% of their purchasing power.
That may not sound like a lot, but if you were just scraping by before, times are tough now. And Russia is not a rich country, so there are many who are experiencing tough times now.
But remember for many Russians a leader where there is no hunger in Russia, is considered a good leader!! That's a frigging low bar.
But still a weak economy will undermine their war effort.
At the beginning of August, you could get 84 rubles for $1, today you can get 91 rubles for $1. It's certainly not "cratering" per that hyperbolic headline, but it's not an insignificant change, especially since the exchange rate had otherwise been on a downward trend since April.
Now try to buy $1 with 91 rubles.
I heard the dollar went for around 200 rubles on the black market...