Writer Michael Casey makes some good points in today's column wsj.com. He cites persuasive evidence that Mr. Putin's machinations will not help Russya's economy now or in the near term. For some time, over 9 months and counting, the fragile state of economic affairs in the Federation has teetered on the edge of recession/depression. However, Kremlin politicians merely pay lip service to facts that require a change in economic policy.
When the price of oil halved in a few months last year, the flight of capital from state-owned banks began in earnest. This forced the hand of vodka-sotted bankers and Kremlinites. Raise rates to keep roubles at home(vice transfer to dollars/Euros). Meanwhile, Mad Vlad is running amok in Ukraine/Crimea, making rash statements to rattle markets around the globe, kidnapping foreign nationals in Baltics, and sending military aircraft and submarines on provocative forays into home waters. Wonderful man, that Vlad Vladimirovich. I think his pants are too tight.
Mr. Casey makes some key points on inflation in Russya and Brazil, two former darlings included in the BRICS. Now serious inflation is rearing its ugly head. As of March, 2015, the rouble is going up at a 16.9% rate of inflation. How would you like to confront this situation? No, neither would I or any other Tahoman. It has implications that reach across borders into the Euro zone and beyond. The IMF is on the verge of declaring the Chinese yuan properly valued. This affects all foreign exchange transactions, especially inter-government loan payments.(see Greece bailout terms).
No doubt the Russyan oligarchs will pay closer attention to the price of borscht soup. Speaking of soup......
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