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Ask HN: Why did the ruble stabilize and what's going on?

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Re: Ask HN: Why did the ruble stabilize and what's going on?

#161

Post by maxfromua »

Let me tell you an old Jewish anecdote from Odesa (Ukrainian city with a significant Jewish population; russians hit a residential building there using a missile strike today, a few people died, 1 kid among them). - Moisha, what’s the price of this meat? - Abraham, it is 300 UAH/kilogram. - But your neighbor is selling at 200 UAH/kg. Why yours is so expensive? - Why don’t you buy there then? - He doesn’t have it anymore. - Well, when I don’t have meat, I sell it at 100 UAH/kg.

So, the price can be any when you don’t have a free market. In USSR, the official exchange rate was 0,7 rouble per dollar. Black market was 2-3 (might differ, depending on the year, of course).

Recently I have seen photo with X-rates in moscow: USD buying at 70, selling at 300 EUR buying at 80, selling at 100 Looks silly, right? Everyone knows EUR costs more than USD. The reason is the same as in the anecdote above.

Re: Ask HN: Why did the ruble stabilize and what's going on?

#162

Post by tsol »

postalrat wrote: post #141
exabrial wrote: post #127

There's no doubt extensive manipulation, but don't forget the EU is still buying ""essential"" gas and other petrochemicals from Russia. Grow a pair: Lift the ban on domestic exploration. Open the floodgates from other countries. People's are dying over cheap gas.

And face mass layoffs, shutdowns, etc in europe?

Isn't the reasoning for this whole thing humanitarian? That's why it's okay that many poor Russians will starve if the economy is successfully damaged. Seems losing a few jobs is worth saving lives

Re: Ask HN: Why did the ruble stabilize and what's going on?

#163

Post by landemva »

killingtime74 wrote: post #155
landemva wrote: post #153

Earlier quoted context omitted.

>>> This does not mean that the existing sanctions aren’t working. What metrics do you use to determine 'working'? Can you provide a couple examples of sanctions working to provide peace?

How about South Africa dropping apartheid? Didn’t take a civil war to accomplish

Good example there of internal change expedited by international actions.

How do the present sanctions on Russia help expedite Zelensky allowing "Minsk agreement" elections in eastern Ukraine (Luhansk and Donetsk)?

Re: Ask HN: Why did the ruble stabilize and what's going on?

#164

Post by xyzzy21 »

Simple.

1. Russian anticipated the sanctions - this isn't the first time - so Russian had some plans in place. They've been dumping US Fed Treasuries and hoarding gold. That's part of removing USD dependence.

2. Russian has plenty of internal resources with plenty of industry to replace enough (not all) of the sanctioned imports.

3. Russians support Putin at nearly 80%. Sanctions have electrified Russian patriotism. A funny set of Tweets are Russian women tearing up the expensive Coco Chanel products. That's thousands of USD worth torn up because patriotism.

4. Russian has the EU by the balls because Green Energy doesn't and won't replace the Russian exports of oil and nat gas; compounding that is Germany shutting down nuclear power plants exactly when they can least afford it. The next play: demanding payment of the same oil and gas in Rubles rather than USD. The assumption that the USD is supreme is wrong and provably so now with the Ruble rebound.

5. Russian has plenty of allies who leak past the sanctions - like 2/3rds of the world's countries by population - it's LITERALLY only the West who is sanctioning. This is akin to how Cuba was/is embargoed ONLY by the US but not Canada or Mexico.

6. By doubling down on sanctions the US has primarily weakened the Petrodollar which is the ONLY REASON the USD is as strong as it is and the only reason we have the lifestyle levels we have today despite having very low economic production - we'd be closer to Portugal in effective economic strength without having USD reserve currency status. It's a subsidy that has made and still makes us super lazy and entitled.

6a. The US is still living in the delusion of being unipolar and "indispensable". That is no longer reality and sanctions accelerated the move to multipolar.

Re: Ask HN: Why did the ruble stabilize and what's going on?

#165

Post by simonblack »

jupp0r wrote: post #31

Supply and demand. 1. Capital controls. Russians are legally not allowed to sell their Rubles anymore. This decreases supply and keeps prices up. 2. A healthy dose of foreign currency ($1B/day from Germany alone) gives the Russian central bank plenty of tools to buy Rubles and increase demand for it to keep prices up. This does not mean that the existing sanctions aren’t working. Eventually Russian factories will run…

Eventually Russian factories will run out of machine spare parts

Most parts are able to be manufactured anywhere. Certainly, it is cheaper (generally) to buy the parts from the usual manufacturers. But supply and demand will cause those parts to start to be made, whether in Russia itself, or in China (more likely). If those parts start to get made more cheaply in China than the original 'western' parts, the western parts will eventually become uneconomic to make and be pushed out of the market.

Sanctions are generally a two-edged sword. There is pain caused to the sanctioned party in the short-term, but the sanctioning party more often finds itself damaged in the long-term by being shut out of its traditional markets when the sanctioned party starts buying things elsewhere.

Re: Ask HN: Why did the ruble stabilize and what's going on?

#166

Post by lr1970 »

tuatoru wrote: post #131
gutitout wrote: post #78

I’m surprised I haven’t seen the right answers here yet, so I will chime in. 1. Russia produces 12% of the world's oil and has a similar share of global oil exports. [0] Those purchases are now being made in Rubels.[1] This was a direct retaliation to the USA and European sanction efforts. Before this oil was universally exchanged in USD or EUR. This has helped prop up the Rubel. 2. Russia moving back to a gold stand…

> My personal feeling (contrary to most comments here) is that the sanctions have a terrible effect on the USA and Europe .. [etc] Russia's GDP is about 5% that of the US and the EU combined. It's not big enough to "destabilise" anything. Brexit (loss of an economy 4x larger than Russia's) is not having a terrible effect on the EU. Wannabe competitors to SWIFT are even smaller in relative size, and as for India and C…

> Brexit (loss of an economy 4x larger than Russia's) is not having a terrible effect on the EU.

By Purchasing Power Parity (PPP) the GDP of Russia (4,365,443 $MM) is larger than the GDP of UK (3,751,845 $MM) [1]. Stating that UK economy is 4x of Russia's does not seem to have a basic in reality.

[1] https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)

Re: Ask HN: Why did the ruble stabilize and what's going on?

#167

Post by theamk »

landemva wrote: post #163
killingtime74 wrote: post #155

Earlier quoted context omitted.

How about South Africa dropping apartheid? Didn’t take a civil war to accomplish

Good example there of internal change expedited by international actions. How do the present sanctions on Russia help expedite Zelensky allowing "Minsk agreement" elections in eastern Ukraine (Luhansk and Donetsk)?

Why would you expect current sanctions to help with that? Both DPR and LPR are under sanctions themselves.

Re: Ask HN: Why did the ruble stabilize and what's going on?

#168

Post by moralestapia »

hypertele-Xii wrote: post #137
philwelch wrote: post #123

Earlier quoted context omitted.

I think that’s what a silent majority of reasonable people might think, but there is still a ton of indiscriminate anti-Russian bigotry going around.

Quoted post unavailable.

Yeah sure, boy, particularly people who haven't lived in Russia for the past 20 years or so ...

Re: Ask HN: Why did the ruble stabilize and what's going on?

#169

Post by cosodelcosito »

TMWNN wrote: post #129
pjc50 wrote: post #16

Russian exports have been badly dented, but some oil and gas remains. Russian imports have been completely wrecked. Effectively the sanctions have _improved_ their balance of payments. They have some money, but nobody will sell to them. Slightly different situation from their money being worthless because they're outspending their ability to earn hard currency.

>Russian exports have been badly dented, but some oil and gas remains. Russian imports have been completely wrecked. Effectively the sanctions have _improved_ their balance of payments. Yes, I think this is the key. The difference between Russia and Argentina (where gus_massa is) is that in the latter, anyone with US dollars can buy things from/travel to abroad. Thus there is meaningful demand for dollars that contra…

In Argentina you can legally buy USD without any limits now through "contado con liqui". The USD 200 limit applies only to individuals not commercial operations.

https://www.infobae.com/economia/2022/03/03/el-gobierno-flex...

Re: Ask HN: Why did the ruble stabilize and what's going on?

#170

Post by exabrial »

brokensegue wrote: post #138
exabrial wrote: post #127

There's no doubt extensive manipulation, but don't forget the EU is still buying ""essential"" gas and other petrochemicals from Russia. Grow a pair: Lift the ban on domestic exploration. Open the floodgates from other countries. People's are dying over cheap gas.

It would take a long time to dramatically increase petroleum production. Doesn't seem relevant to the crisis. And long term we want to reduce fossil fuel production.

Don't forget, most petroleum markets are driven on speculation. In my anger with my og comment I didn't consider the EU, especially Germany's, market might not be.
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