Unless Russia decides to completely move off of "petrodollar"...they've already started to back RUBLE with gold and one of their largest oil suppliers, Rosneft, has moved to EURO as their default currency.
If they backed their ruble with gold, the war would be over in a week. The Russian economy is functioning (barely) because they can print as much rubles as they need to pay the soldiers and factory workers.
I remember when I visited the USSR in 1990 (it was still the USSR at that point, barely), it was around 8 rubles to the dollar, and the buying power of those 8 rubles was very large indeed.
I think I took a total of $200 US on the trip, and I was not even able to spend it all, despite being in the USSR for a couple weeks. There simply was not enough to buy that anyone would want to buy, at least not things I could take back on the plane. I ended up getting 9 very nice fur hats, for that reason, to give out to family and friends. I still have mine! It's very warm and nice.
I also went there (and Ukraine) in 1990. I remember the official rate was 4 rubles to the UK pound, but on the street outside the hotel it was 15 without even bargaining.
I 100% agree, now who you want to be the judge of bad/good wars? The UN w/ veto power for big countries? Maybe the international war crime court where "the US government has said that it will not cooperate with the ICC and has threatened retaliatory steps against ICC staff and member countries should the court investigate US or allied country citizens" [0]?
Don't get me wrong, as an American citizen, I enjoy my privilege very much. But, if I didn't have this privilege, I would fight as hell for amoral money or at least a fair international court.
If crypto were ubiquitous as a currency (assuming that's technically possible in terms of scale in a way that the current implementations seem not to be) sanctions in the first place would have been impossible. So depending on your viewpoint that's a major downside to the idea of a decentralized currency.
This isn't at all true. When companies aren't permitted to do business with Russia, currencies and forms of payment don't matter. If I own a company in the US, I'm not going to ship any products to Russia, regardless of whether I'm paid in roubles, crypto or dollars.
The sanctions regarding exports to Russia have to this point been relatively limited. The financial sanctions are what are doing the work right now.
Russia's principle problem is that its own currency is becoming worthless and external currencies are becoming inaccessible. This is a problem for the Russian state as well as individuals residing in it. If a ubiquitous and stable worldwide cryptocurrency were to exist, this would no longer be so much of a problem for Russia, to the detriment of all other sane countries.
Let's not kid ourselves, if there was such cryptocurrency the sanctions would have been drafted differently and the end result would have been the same.
The sanctions are being created for the world in which we live now. If you want to consider a theoretical world in which crypto is the main form of currency, you would also need to consider what kind of sanctions governments would impose in that world, not just assume that they'd do the exact same thing they're doing in the current circumstances.
You're looking purely at the theoretical possibilities of crypto while ignoring the reality of a situation in which major sanctions are enacted. Who are the people who are going to be selling their services to Russia in a situation like this? You can already see companies that haven't chosen to suspend business in Russia (even though there are no sanctions forcing them to stop) suffering major reputational damage.
Just because you could theoretically get around sanctions doesn't mean that any serious number of people would do it. It also doesn't mean that you can't get caught - it's not like you can untraceably provide services, so there's very much a nonzero chance you get caught.
That was my question too... to get practical use out of it in terms of transferring value, 9/10 it goes back to fiat - and that's going to be centralized in a majority of the cases.
I can buy some hosting services with crypto, but pretty much everything else I'm involved with requires USD or equivalent.
I also like to make my purchases at a whim - crypto jumping up/down with the moment means one payment today could've been two tomorrow. I try to spend it well but this is unnecessary calculus
If crypto really was the norm sanctions would look like making transactions with sanctioned entities a crime (not that it already isn’t) and local violators would get targeted and charged a whole lot more.
The “decentralized” part of crypto works for black markets and money laundering on scales which get ignored, but you’d better bet that if the west wanted to sanction a country they would succeed even if crypto was a significant portion of the economy.
How on earth does cryptocurrency help? If I owned RUB, they've devalued by the same amount vs every other currency, including bitcoin.
If your argument is 'you should have bought bitcoin before', then I could have bought any other currency before, including all the useful ones as well. There's no blockchain magic to the rescue here.
You do realize the issue isn't technological (blockchain is a technology after all), it's regulatory. The reason people say blockchain "solves" this "problem" is that it renders regulation much harder through cryptography. This is why I would expect cryptocurrencies to "come to a bad end," to quote Warren Buffett. Government regulation exists for a reason.
This reminds me of my honeymoon vacation. My wife and our baby daughter were visiting friends in Argentina. They told us to bring our whole vacation budget in 100 EUR bills and they'd exchange it for us into Pesos on the black market at a much better rate. The physical bills were really cumbersome to carry around and keep safe - I believe the highest denomination was around 10 EUR.
This is when I understood the privilege of living in a relatively stable monetary system with a highly valued currency.
> This is when I understood the privilege of living in a relatively stable monetary system with a highly valued currency.
Very true. I am grateful to be living in America where people are valued and it is hard for autocrats to stay in power (Trump certainly came close). A life lived in a pariah state is a life wasted.
Russian monetary system was pretty stable by the way. It's not about financial institutions doing a bad job, it's just a dictator not accountable to anyone waging wars he can't afford.
The mind boggling thing is that he could have had a legacy. He steered Russia through a period of pretty consistent growth after the collapse of the Soviet Union. He could have been that guy, the guy who helped Russia's economy recover and made lots of Russian billionaires very happy. He's not a good man, and his legacy would always be colored by his treatment of his neighboring nations and his political opponents, but he'd definitely make it into the history books.
Going down as an aggressor and turning his entire country into a geopolitical pariah seems bizarre.
> Going down as an aggressor and turning his entire country into a geopolitical pariah seems bizarre.
I watched this Guardian interview last week where a historian described Putin as a relic of the 19th century: a time where might made right. And I'm tempted to agree. He doesn't see the world with nuance; and doesn't give any credence to the concept of "soft power"—he's a realpolitik hardliner stuck in the Cold War.
I don’t think he expected the U.S. and Europe, particularly Germany, to be able to put aside recent differences and act in a fairly united fashion as they’ve done; but now that he’s committed to the action he’s going to see it through, no matter the cost. And at this point there’s not much left for him to lose.
His motivation was that he thought it would work. He thought he had a great army, he thought the West was weak and divided, he thought Zelenskyy would flee the country. Now his motivation is the sunk cost fallacy.
I don’t know if I would say it’s the sunk cost fallacy.
If he pulls out now having not achieved anything except destroying the Russian economy then his government is surely doomed. It seems likely that he would eventually be killed or at least imprisoned for life after such an event also.
Therefore his only option is to carry on in the hopes of getting to the point where he can claim some kind of victory, however likely or unlikely that may be.
> Therefore his only option is to carry on in the hopes of getting to the point where he can claim some kind of victory
Just to add, he already moved his demands from "Surrender all of Ukraine" to "Surrender those two territories". The one horrible thing here is that there is no demand that he can "win" without harming a lot of innocent people, so he will keep pushing it, no matter how bad things get.
He wasn't far off. It's American stratotankers with British Eurofighters and F35 circling above Poland along the border with Ukraine... the response and sanctions without these two would limp behind if we counted only on continental EU countries, then Nordics only care about their own backyard.
Patriarch Kirill who leads the orthodox church in Russia and is very close to Putin recently said that the war started because people in east Ukraine, in those separatists areas can't allow LGBT parades on their streets. He really said that.
Interesting. I heard from some older, conservative East EU folks that they approve of Putin because Ukraine is full of "drug addicts and immoral behavior." So maybe there is a religious conservative thread backing this conflict. This kind of thinking is not that unusual in the US either...
>> This kind of thinking is not that unusual in the US either...
Right! They just passed the "Stop the woke" bill in Florida that has anti-LGBT parts all over it. I guess it's also based on religious beliefs of whose who support right-wing lunatics in the USA.
And don't forget about the Texas governor trying to place himself between children, parents, and doctors because his base doesn't like the choices they make. This is the same crowd that screamed about the ACA allegedly creating death panels that replace doctors and patients as decision makers. Kids are going to die because they don't get the care they need or are forced into homes that affirm the governor's worldview.
The nationalist Orthodox Church leaders are quasi-government employees. An intelligent officer is attached to their office and write their sensitive speeches for them. Kinda of open secret among the Orthodox faithful (who, at least in America) ignore these kinda of things.
You can ask the same question to other failed dictators - at some point they get overconfident and make a grave mistake. Now the world would like to give him a golden bridge, but there's hardly any.
Have you seen their demands? If Ukraine agrees, they get what they want - more land, won't get pounded by more fighting, etc. Seems like a crazy calculation but tit might be what they wanted. If Ukraine agrees, it also has the side effect of making Russia appear "reasonable" if they actually stop fighting.
He misses the USSR. He misses the Cold War. He misses the restrictive cultural atmosphere of totalitarianism. And he wishes he could have fought the Nazis.
Now, at the age of 69, he gets to relive his youth.
Annexing Crimea went relatively easily for Putin. It makes sense, given that past success, that he expected little resistance from Ukraine or the rest of the world.
I think his motivation is purely personal one, don't try to find any rationality there. Think about a small child that wants to get something or an ex-boyfriend wants his girlfriend back.
There could be a number of reasons why you can’t figure out Putin’s motivation but no one knows who you are so there is no way of knowing what the actual reasons are.
It worked for Germany because they were arguably the world leader (or close) in technology and all sorts of things in the early 20th century. Russia is not that today and can’t buy their way into success. They can’t win a war against a small neighbor, the only thing to fear is a desperation nuclear war, and that risk is quite small.
Some forex trading platforms let you get up to 400x leverage since currency is usually very stable. I'm sure it's restricted to certain currency pairs, but damn imagine getting caught on the wrong (or right!) side of that.
Volatility didn't change overnight, I'm sure margin requirements for speculating on Rub increased dramatically in the run-up to the war. It's unlikely they allowed any margin at all on the eve of the invasion.
I wonder if the higher interest rates offered by Russia lead to many people getting into carry trades that would now be blowing up. I wonder if there is a repeat of LTCM hiding somewhere.
Of course Putin and cronies won't get affected and won't stop the war because they are old and have already lived a full life and they are still the richest Russians.
The entire episode of Putin has convinced me that as a human organizational structure - Leaders must have an expiration date and there has to be a system to preemptively eject politicians from power.
Of course, people in leadership positions will hate this.
They will just have to accept a downgrade from dozens of yachts and penthouses to only a few of them (or even share a yacht!), from tens of billions of net worth to single billions. It feels like Americans cancelled the money they have printed since the outbreak of the pandemic with these sanctions.
> Of course, people in leadership positions will hate this.
I don't think so. If you look at political leadership in the USA, there are names that remain in power for decades. Henry Kissinger worked with every republican administration from Nixon to Bush Jr., and even met with Trump a few times.
One need not be president to wield sizable influence.
1. If I had shorted RUB on US intelligence reports leading up to the invasion, would I be able to collect, or would illiquidity stop me from being able to obtain RUB to cover my shorts?
2. What does this correspond to in terms of what will happen to their economy? Will everyone with savings be out half, while everything adjusts to the new prices and the fixed value of Russia's natural resources simply re-denominates into 2023 rubles? Too bad they halted stock trading, otherwise we'd know what the future expectations for profit are.
3. Does this indicate anything beyond A. a rush to move money out of the country and/or B. an expectation that their government will be printing a lot of money?
> 1. If I had shorted RUB on US intelligence reports leading up to the invasion, would I be able to collect, or would illiquidity stop me from being able to obtain RUB to cover my shorts?
The keyword you need to put into Mr Google is "B-book".
Unless you:
a) Are a big-cheese in the trading world; or
b) Opened an account with the very very very very small number of brokers that are 100% A-Book
You will almost certainly be trading on a B-book account.
In a simplified nutshell, B-Book means that your order never goes anywhere near the market. Your trades are internalised by your broker, they are market makers for their own book, and they settle their trades internally. Your broker reduces their own internal risk on their B-book by (if necessary) making the necessary risk-reducing trades on the real market.
So in essence, yes you would be able to "collect" because your broker would be doing the settlement internally.
However, and its a BIG however. In exceptionally volatile markets such as Ukraine events, your broker will implement risk management procedures in order to prevent lots of clients blowing up their accounts and therefore exposing your broker to a large aggregated risk. Therefore unless you already had a trade in-play before risk management was enabled, its unlikely you'll be able to put on much now (at least not without a large margin requirement).
I should say that all the foregoing applies soley to "day-trading" (i.e. CFDs, Spread Bets, Futures etc.). For equities ("stocks & shares") then then there is always external settlement.
Would buying an option be less risky for the broker? Even when they enable "risk management" do you think they would halt option trading?
I'm no expert so I'm just speculating here. IIRC, an option is you making an agreement with some entity to say "hey here is $X (2-5%) for you to hold on to (PUT?) or to let me buy (CALL?) within the next 2 weeks."
The difference between that and a classic "short" is that you never actually hold the stock/asset with an option. (IIRC, a short means you buy and sell but need to cover within X days.)
I'm probably wrong on some level here. For this thread though I think others would probably enjoy some more explanations about how profiting in a decreasing market works because it's always trickier than with traditional "up and to the right" one.
> Would buying an option be less risky for the broker? Even when they enable "risk management" do you think they would halt option trading?
With the caveat that whilst I'm familiar with the financial sector, I'm no expert in structured products...
My understanding is that if the broker has sufficient internal volume, then what will happen is they will just Net-Net internally.
By that I mean match trades, i.e. Alice puts on a Buy for 10 and Bob puts on a Sell for 10 (or <10). By definition its not possible for both of them to "win", so the "loser" will pay the other person's winnings as well as the broker's commission.
If there is insufficient volume whether due to lack of clients or a particular product is particularly volatile / illiquid, then the broker may then take steps to hedge externally. In that case yes, they may use options, futures, swaps or any other derivative products (typically they only use derivatives to hedge, but sometimes they might use physical trades).
Regarding halting trading, typically this is only done in extreme circumstances where they themselves cannot get a handle on what's going on (see the unexpected unpegging of the Swiss Franc for a good example).
Otherwise in most cases, what will normally happen is they will ramp up the margin requirements which will (a) discourage most traders (b) provide them with enough breathing space for the traders that still wish to participate.
As of yesterday, it was 1:112, already sharp decline in RUB value compared to pre-war/pre-sanction levels of ~1:80. Now it's 1:158.
What changed in the last 24 hours? I'm no expert, but apparently, this lines up with Moody's downgrading of Russia's credit rating to Ca:
> *Moody's said default risks had increased, and that foreign bondholders were likely to recoup only part of their investment.*
> "The likely recovery for investors will be in line with the historical average, commensurate with a Ca rating," it said. "At the Ca rating level, the recovery expectations are at 35 to 65% (of face value)."
Russia said they would pay foreign bond holders in rubles even if the bonds are owed in dollars and euros. The exchange rate would be set by the central bank. Most would consider this a default on the loans.
If that's fake, you can make an easy 50% profit by arbitraging it. If you are somehow practically unable to arbitrage it, then you just discovered the reason why the conversion rates are so different.
If the Russian people can't convert their Rubles to USD/Euro or buy products outside their country, does it really matter? Like, sure if they bought something overseas it might cost twice as much as before, but that does not necessarily imply that you have to adjust prices for products inside of Russia, as everyone still functionally has the same amount of money.
Of course, this is without talking about all of the effects from being cut off from the global supply chain, which will certainly cause chaos on an economy. I guess what I am ultimately asking is, did the Ruble lose value, or did every other currency that isn't a Ruble gain value? Does the currency conversion rates actually represent purchasing power of currencies?
Assuming this is the actual price of RUB, and not an artifact created by the illiquidity of RUB on sanction-impacted "retail investor" markets while the real money changes hands elsewhere (I have no reason to believe that, I am simply listing every possible scenario), this will stick around until long after the war is over.
>I guess what I am ultimately asking is, did the Ruble lose value, or did every other currency that isn't a Ruble gain value?
Foreigners with dollars will compete with Russians with rubles to buy local Russian goods, unless Russia disconnects itself from global trade. This will impact local prices, even the prices of raw natural resources, because the world is all one big market (unless Putin discovers the Juche Idea - but beware, even North Korea, one of the most isolated states on Earth, sells natural resources to China at prices at least somewhat tied to commodities markets.) Anything that involves imports to produce (this is a bigger category than you think, Russia does not make its own oilfield or farm equipment!) will be impacted even more inevitably.
Things like Russian real estate could remain steady in RUB denominated price if Europeans are not allowed to compete with Russians to buy it, but wheat, tractors, things like that are going to become twice as expensive almost inevitably. Fortunately that will be counterbalanced by everyone's wages doubling (foreign firms compete with each other to hire Russians) unless, again, Putin disconnects from global trade.
In that case, the biggest problem will be the availability or lack thereof of goods at any price.
It's used quite often on Russian web-sites nowadays. A few years ago it was pretty rare, with most sites just using the abbreviation "руб." (rub.).
As for physical locations, those tend to use the abbreviation, possibly because there's more space on the paper price tag than there is on your mobile screen, but could also be due to some law or some tag printers not supporting this symbol, not sure.
Can anyone explain the consequences of this coupled with the list of "unfriendly countries" that Russia just announced? [0]
> Russian citizens and companies, the state itself [..] that have foreign exchange obligations to foreign creditors from the list of unfriendly countries will be able to pay them in rubles
133 comments
[ 4.2 ms ] story [ 188 ms ] thread"Easy money, easy wars, hard money, hard wars".
But what difference does it make?
I think I took a total of $200 US on the trip, and I was not even able to spend it all, despite being in the USSR for a couple weeks. There simply was not enough to buy that anyone would want to buy, at least not things I could take back on the plane. I ended up getting 9 very nice fur hats, for that reason, to give out to family and friends. I still have mine! It's very warm and nice.
We do away with this power at our peril.
Don't get me wrong, as an American citizen, I enjoy my privilege very much. But, if I didn't have this privilege, I would fight as hell for amoral money or at least a fair international court.
0. https://www.hrw.org/news/2020/09/02/qa-international-crimina...
Russia's principle problem is that its own currency is becoming worthless and external currencies are becoming inaccessible. This is a problem for the Russian state as well as individuals residing in it. If a ubiquitous and stable worldwide cryptocurrency were to exist, this would no longer be so much of a problem for Russia, to the detriment of all other sane countries.
Take the payment in crypto, don’t ask where the customer is located.
Just because you could theoretically get around sanctions doesn't mean that any serious number of people would do it. It also doesn't mean that you can't get caught - it's not like you can untraceably provide services, so there's very much a nonzero chance you get caught.
I can buy some hosting services with crypto, but pretty much everything else I'm involved with requires USD or equivalent.
I also like to make my purchases at a whim - crypto jumping up/down with the moment means one payment today could've been two tomorrow. I try to spend it well but this is unnecessary calculus
If crypto really was the norm sanctions would look like making transactions with sanctioned entities a crime (not that it already isn’t) and local violators would get targeted and charged a whole lot more.
The “decentralized” part of crypto works for black markets and money laundering on scales which get ignored, but you’d better bet that if the west wanted to sanction a country they would succeed even if crypto was a significant portion of the economy.
If your argument is 'you should have bought bitcoin before', then I could have bought any other currency before, including all the useful ones as well. There's no blockchain magic to the rescue here.
[0] https://media.ccc.de/v/33c3-8315-a_world_without_blockchain
I wouldn’t be too surprised if the street rate for buying USD within Russia is 200 Rubles to the dollar.
This is when I understood the privilege of living in a relatively stable monetary system with a highly valued currency.
Very true. I am grateful to be living in America where people are valued and it is hard for autocrats to stay in power (Trump certainly came close). A life lived in a pariah state is a life wasted.
$1 in cash is worth more than $1 in your Russian bank account.
What gets me is I still can't figure out what Putin's motivation is. Is this really better than having left things alone?
He's the leader of a quasi-superpower trying to forge a legacy. History books are littered with guys like him.
Going down as an aggressor and turning his entire country into a geopolitical pariah seems bizarre.
I watched this Guardian interview last week where a historian described Putin as a relic of the 19th century: a time where might made right. And I'm tempted to agree. He doesn't see the world with nuance; and doesn't give any credence to the concept of "soft power"—he's a realpolitik hardliner stuck in the Cold War.
He wishes, he’s the leader of a midsize nation longing for the days when it was considered a superpower.
He thought they'd be in and out without much resistance and be able to escape truly harsh sanctions.
I really doubt the current situation was the plan...
Sanctions can be reversed.
If he pulls out now having not achieved anything except destroying the Russian economy then his government is surely doomed. It seems likely that he would eventually be killed or at least imprisoned for life after such an event also.
Therefore his only option is to carry on in the hopes of getting to the point where he can claim some kind of victory, however likely or unlikely that may be.
Just to add, he already moved his demands from "Surrender all of Ukraine" to "Surrender those two territories". The one horrible thing here is that there is no demand that he can "win" without harming a lot of innocent people, so he will keep pushing it, no matter how bad things get.
He wasn't far off. It's American stratotankers with British Eurofighters and F35 circling above Poland along the border with Ukraine... the response and sanctions without these two would limp behind if we counted only on continental EU countries, then Nordics only care about their own backyard.
Right! They just passed the "Stop the woke" bill in Florida that has anti-LGBT parts all over it. I guess it's also based on religious beliefs of whose who support right-wing lunatics in the USA.
Better for Putin's self-esteem. Worse for everybody.
[1] https://en.wikipedia.org/wiki/Door-in-the-face_technique
That's what happened last time. It's not completely ridiculous to expect it to happen again.
He misses the USSR. He misses the Cold War. He misses the restrictive cultural atmosphere of totalitarianism. And he wishes he could have fought the Nazis.
Now, at the age of 69, he gets to relive his youth.
https://www.investing.com/currencies/usd-try
I remember checking Revolut and it offered to buy USD for ~75 RUB and sell USD for ~140 RUB (there are no fees).
Such uncertainty!
The entire episode of Putin has convinced me that as a human organizational structure - Leaders must have an expiration date and there has to be a system to preemptively eject politicians from power.
Of course, people in leadership positions will hate this.
I don't think so. If you look at political leadership in the USA, there are names that remain in power for decades. Henry Kissinger worked with every republican administration from Nixon to Bush Jr., and even met with Trump a few times.
One need not be president to wield sizable influence.
1. If I had shorted RUB on US intelligence reports leading up to the invasion, would I be able to collect, or would illiquidity stop me from being able to obtain RUB to cover my shorts?
2. What does this correspond to in terms of what will happen to their economy? Will everyone with savings be out half, while everything adjusts to the new prices and the fixed value of Russia's natural resources simply re-denominates into 2023 rubles? Too bad they halted stock trading, otherwise we'd know what the future expectations for profit are.
3. Does this indicate anything beyond A. a rush to move money out of the country and/or B. an expectation that their government will be printing a lot of money?
The keyword you need to put into Mr Google is "B-book".
Unless you:
You will almost certainly be trading on a B-book account.In a simplified nutshell, B-Book means that your order never goes anywhere near the market. Your trades are internalised by your broker, they are market makers for their own book, and they settle their trades internally. Your broker reduces their own internal risk on their B-book by (if necessary) making the necessary risk-reducing trades on the real market.
So in essence, yes you would be able to "collect" because your broker would be doing the settlement internally.
However, and its a BIG however. In exceptionally volatile markets such as Ukraine events, your broker will implement risk management procedures in order to prevent lots of clients blowing up their accounts and therefore exposing your broker to a large aggregated risk. Therefore unless you already had a trade in-play before risk management was enabled, its unlikely you'll be able to put on much now (at least not without a large margin requirement).
I should say that all the foregoing applies soley to "day-trading" (i.e. CFDs, Spread Bets, Futures etc.). For equities ("stocks & shares") then then there is always external settlement.
I'm no expert so I'm just speculating here. IIRC, an option is you making an agreement with some entity to say "hey here is $X (2-5%) for you to hold on to (PUT?) or to let me buy (CALL?) within the next 2 weeks."
The difference between that and a classic "short" is that you never actually hold the stock/asset with an option. (IIRC, a short means you buy and sell but need to cover within X days.)
I'm probably wrong on some level here. For this thread though I think others would probably enjoy some more explanations about how profiting in a decreasing market works because it's always trickier than with traditional "up and to the right" one.
Cheers!
With the caveat that whilst I'm familiar with the financial sector, I'm no expert in structured products...
My understanding is that if the broker has sufficient internal volume, then what will happen is they will just Net-Net internally.
By that I mean match trades, i.e. Alice puts on a Buy for 10 and Bob puts on a Sell for 10 (or <10). By definition its not possible for both of them to "win", so the "loser" will pay the other person's winnings as well as the broker's commission.
If there is insufficient volume whether due to lack of clients or a particular product is particularly volatile / illiquid, then the broker may then take steps to hedge externally. In that case yes, they may use options, futures, swaps or any other derivative products (typically they only use derivatives to hedge, but sometimes they might use physical trades).
Regarding halting trading, typically this is only done in extreme circumstances where they themselves cannot get a handle on what's going on (see the unexpected unpegging of the Swiss Franc for a good example).
Otherwise in most cases, what will normally happen is they will ramp up the margin requirements which will (a) discourage most traders (b) provide them with enough breathing space for the traders that still wish to participate.
"Sincere Question : How to short the Russian Ruble":
https://www.reddit.com/r/wallstreetbets/comments/sbvjiw/sinc...
What changed in the last 24 hours? I'm no expert, but apparently, this lines up with Moody's downgrading of Russia's credit rating to Ca:
> *Moody's said default risks had increased, and that foreign bondholders were likely to recoup only part of their investment.*
> "The likely recovery for investors will be in line with the historical average, commensurate with a Ca rating," it said. "At the Ca rating level, the recovery expectations are at 35 to 65% (of face value)."
https://www.reuters.com/business/finance/moodys-cuts-russia-...
This may also be related to American and European efforts to ban imports of Russian petroleum.
On the Wise page it says "Sending money to RUB with Wise is temporarily stopped." So yeah, that's why the rates are so different.
Similar in Soviet times there was a special internal rate that was very disconnected from international.
Of course, this is without talking about all of the effects from being cut off from the global supply chain, which will certainly cause chaos on an economy. I guess what I am ultimately asking is, did the Ruble lose value, or did every other currency that isn't a Ruble gain value? Does the currency conversion rates actually represent purchasing power of currencies?
>I guess what I am ultimately asking is, did the Ruble lose value, or did every other currency that isn't a Ruble gain value?
Foreigners with dollars will compete with Russians with rubles to buy local Russian goods, unless Russia disconnects itself from global trade. This will impact local prices, even the prices of raw natural resources, because the world is all one big market (unless Putin discovers the Juche Idea - but beware, even North Korea, one of the most isolated states on Earth, sells natural resources to China at prices at least somewhat tied to commodities markets.) Anything that involves imports to produce (this is a bigger category than you think, Russia does not make its own oilfield or farm equipment!) will be impacted even more inevitably.
Things like Russian real estate could remain steady in RUB denominated price if Europeans are not allowed to compete with Russians to buy it, but wheat, tractors, things like that are going to become twice as expensive almost inevitably. Fortunately that will be counterbalanced by everyone's wages doubling (foreign firms compete with each other to hire Russians) unless, again, Putin disconnects from global trade.
In that case, the biggest problem will be the availability or lack thereof of goods at any price.
And it spiked to 174 earlier today.
> Russian citizens and companies, the state itself [..] that have foreign exchange obligations to foreign creditors from the list of unfriendly countries will be able to pay them in rubles
[0] https://tass.com/politics/1418197