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Putin and the ruble

Putin and the ruble
Article by: Vitaliy Portnikov
Translated by: Anna Mostovych

Presidential aide Andrey Belousov has acknowledged that Russia’s foreign currency reserves are insufficient to support the ruble.

This time the official relied on simple arithmetic. There are only some US $300 billion left. Of that sum $120 billion are in the government’s Reserve Fund and the National Wealth Fund — in other words, this is money for social services. A portion of the remaining reserves is enough for nine months of imports of goods. After that comes economic collapse, default, and devaluation of the ruble. Therefore, these are consequences that the Russian government wants to avoid, but, based on everything, no longer can.

Belousov tried to explain why the Russian Central Bank will no longer spend resources to support the value of the “wooden” (pejorative term for ruble, meaning worthless – Ed.). And in doing so, he gave an accurate assessment of the current economic situation in Russia. It is the end result of the reckless policies of Vladimir Putin and his circle. And the problem lies not only in Russia’s war against Ukraine and in the West’s sanctions. The problem is that the St. Petersburg security goons and thugs have robbed the country and have brought it to the brink of the abyss. And now there is simply no way to avoid the fall. The only thing the Kremlin keeps hoping for is that prices for oil will begin to rise again. And if they don’t?

If they don’t, then after nine months some minister will have the task of telling Putin that the treasury is empty. And if Belousov understands this, then everyone else does as well: the collapse is inevitable. Then what to do in this situation? Wait for the crash? Escape? Try to get rid of Putin and his cronies? Or should the cronies get rid of Putin? But how?

These nine months promise to be not simply interesting; they may turn out to be tragic. The predator who realizes that his death is imminent is capable of any gamble to preserve not only power and money but life as well. We know that from the behavior of Yanukovych. Putin now is in a similar situation. He is a living political and economic corpse. But this corpse holds the military capabilities of a disoriented country in his hands. This is why we must all be on high alert.

Translated by: Anna Mostovych
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