Russian Ruble Collapses

When paper money is issued on “faith and confidence” in the government issuing it, the value of that paper can vanish overnight. Russia is being frozen out of basically all international markets and banking systems.  So the value of the ruble has become worthless overnight.  When no one wants something then it’s effectively worthless.  As one frustrated woman said, “who wants rubles?”

So will Putin apologize to the world for this invasion?  Will he apologize to his Russian citizens for putting them into a bad situation?  Will he call his troops home and sit at the feet of the European Union begging for forgiveness?  I’m gonna guess that’s not gonna happen.  So how much global chaos could he cause if he decides to go “scorched earth”?  Well, the other top headline is that Russian tanks have fired on a huge nuclear reactor in Ukraine and it’s on fire.  That could certainty scorch some earth.

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As markets opened in a panic on Monday, many Russians rushed to local cashpoints in Moscow to retrieve their savings before the damage got any worse.

“It said they had dollars so I came here immediately,” said Alexei Presnyakov, 32, pointing to an app for Russia’s Tinkoff Bank, indicating he could withdraw hard currency. About 20 people were queued in line. “Yesterday [the rate] was 80 [to the dollar]. Today it’s 100. Or 150.”

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“I just made a spontaneous decision today that I would ask [out of work] and go around until I took out all my money,” he said. “Before it was worth zero.”

Within minutes, however, the word traveled down the queue: the dollars were gone.

Nearly half the queue walked off. “Who needs roubles?” one woman said sarcastically as she walked away.

One, the owner of an advertising services company with 100 employees, said that he was about to announce to his employees this afternoon that he is leaving the country for Armenia with his wife and two sons.

“I’m going to tell them that we are going into a crisis that we have never experienced before,” he said. “It’s like flying on a plane with no engines or the engines are on fire.”

His company, which handles contracts for international brands like Pepsi and automakers like Volkswagen, was booming as recently as January 2022, a record month for them. Now many of those brands were pulling out of the Russian market and his business was shrinking “immensely”.

Another business owner with hundreds of employees in the food and beverage and tourism industries felt that he was completely in the dark about the future under Vladimir Putin.

“We have no fucking clue what he will do next,” he said. “No one in the business community has a clue any more. Everyone is so depressed. I have experienced so many economic crises here, the pandemic being the latest.

“But there was always a reason to keep on fighting for your business,” he said. “Now, I don’t see the light at the end of the tunnel any more. Even if peace is achieved, the damage is done. How do we reverse it?”

 https://www.theguardian.com/world/2022/feb/28/the-damage-is-done-russians-face-economic-point-of-no-return