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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsRussian stock market plunges 10%, ruble in free fall. Russians expect Ukraine invasion backlash
http://www.bloombergview.com/articles/2014-03-03/bershidsky-on-europe-russian-assets-tumbleAs the possibility of a war with Ukraine and international isolation pushed all Russian financial instruments and the ruble down, the Russian central bank finally decided to defend the free-falling national currency and raised its refinancing rate from 5.5 to 7 percent. Russians, however, have rushed to banks and exchange offices to buy up dollars and euros, and the stock market fell by about 10 percent. The central bank can hardly stop the panic by monetary means: it is caused by overpowering fear and pessimism, both quite rational in the current situation. Though there are macroeconomic reasons for the ruble to weaken, a peaceful resolution of the Crimea conflict would cause it, and the Russian stock indices, to bounce back.
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The US and Europe can affect the situation with economic sanctions. I am in favor of harsh sanctions.
BlueCaliDem
(15,438 posts)This is one war that Putin cannot win no matter how many nukes he has in Russia's arsenal. The Soviet-Dictator-wannabe has realized that there is no Soviet Union anymore and his position in the world is weaker than he first thought. It's all about the money now and all the EU and the U.S. needs to do is freeze the accounts of the Russian oligarchs and Putin will immediately heel with tail between his legs.
He made a very bad move, and now he realizes it. I knew when President Obama came out strongly against the invasion of Crimea that he already had a strategy in place to back up his harsh words. Putin will heel and find a retreat or the oligarchs, who stand to lose billions collectively, will take him out.
stevenleser
(32,886 posts)Ohio4theWin
(60 posts)Tough talk/action would likely be very costly.
stevenleser
(32,886 posts)Russian economy would collapse without the influx of those petrodollars.
stevenleser
(32,886 posts)geek tragedy
(68,868 posts)and 1/8th the size of the EU.
They need trading partners a lot more than their trading partners need them.