From where it really matters. As was totally expected, Russian national currency Ruble lowered itself somewhat, from ₽67 for $1, to 72, or by about 7%. But this is not what really matters: yesterday someone started to preach the gospel of upcoming panic in Russia and even lines forming at currency exchange outlets. Well, as first business day after the holiday has shown--no panic and no buying of US Dollar or Euro out. Business as usual (in Russian). This is not to mention, of course, the fact that nobody in Russia really gives a damn about what is happening on Moscow Stock Exchange. Russia is wired differently. This, however, is not without some drawbacks: Russia is seriously dependent on imports of pharmaceutical products (from EU mostly) and this is one of those sectors which may see a growth of consumer prices. This problem is not new and that was true in USSR as well. Steps to address this situation, including developing own pharmaceutical industry, have been undertaken but as it is the case with any large national project--it takes time. I recall early 2000s demonstrations of diabetes patients because of the shortages of insulin and other diabetic care items. Not anymore, Russia produces a number of own insulin types and covers diabetic necessities well.
In general, modern Russian economy is increasingly flexible and people on the streets of Russia do trust own economy and finances, well, with the exception, of course, of urban office plankton, who due to limited education and intellect, consider themselves all-knowing. But that is expected from this type. So, where are going from here, then? What these few last days are about? I think they are about what is known as tour' de force, commonly known as demonstration of force, by Russia who, as is the case since Putin's 2007 Munich Speech, wanted to remind everyone that present World (Dis)Order lived out its usefulness. Here is how it works:
Remember Gandhi?
This is exactly what is happening. While I am not pushing here the point that the United States or US Dollar are about to collapse, this opinion cannot be ignored:
In other words, as Michael Hudson and many others warned--the crisis of 2008 hasn't been resolved, it was painted over. Banks were saved instead of saving US industries and labor. Recall what happened 24 years ago:
Remarkably accurate, Alan Greenspan is not a stupid man. But in 2008, as was the case even earlier--it was real economy which was sold to financial "industry", not the other way around, and we know the story after that. Thus, the current belch of the "market" is not just about Coronavirus, the "Oil War" initiated by Saudis and having their bluff called by Russia, or, for that matter anything else in particular, it is the whole thing--it is a systemic crisis of the global financial oligarchic capitalism which DID escalate asset values and did even more to enrich a relatively small group of fat cats from Wall Street. We all live with the unfolding consequences of this global fraud, driven by petrodollar and perception of the American military might which served as the pillars of this increasingly unstable system. We all can see today how, quoting Greenspan, it not only threatens but already impaired "real economy, its production, jobs, and price stability".
Methods to overcome this chaos, if someone in the West would decide to overcome it for real, will not be yet another mindless 'shock and awe' spending to avert global recession. These people calling for that, and that is most of Western "financial elite", are morons, since think that pouring gasoline on fire will extinguish it. You cannot expect anything else from them. The measures which really can avoid a complete collapse down the road, even when all current problems with virus and oil will fade away, cannot be and will not be coming from this "elite", they can come only from the State. And that's what makes those needed measures virtually impossible, at least in the United States, albeit, Trump announced measures to deal with this situation remind me something, something which is on the tip of my tongue, ah, yes, state capitalism, also know as "socialism" (it is not really) among most ignorant parts of population:
Funny how things work out, even if to consider that US Congress may sabotage this plan. As Dmitry Orlov once succinctly and sarcastically observed in a piece symptomatically titled Resurrecting the American Economy:
Remember Obama warning in 2009 about people with pitchforks marching on Washington? We are entering this time and we are pass the point of no return.
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