Well, looks like Russia is screwed.
The lesson, kids? It doesn't pay to be a dickhead dictator.
Like, literally. It doesn't pay.
http://www.slate.com/blogs/moneybox...putin_has_no_good_solutions.html?wpsrc=fol_fb
With its currency stuck in a disastrous freefall thanks to Western sanctions and plunging oil prices, the country’s central bank announced around 1 a.m. last night that it would jack up its key interest rate from 10.5 percent to 17 percent. This was a desperate decision. The country was already hurtling toward a recession, and the rate hike—the biggest since 1998, when a financial crisis eventually forced it into default on its debt—was sure to make the pain far worse.
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Today, the currency plunge has continued, with the ruble at one point falling 35 percent, at 80 to a dollar. It has rallied a bit since then. A dollar is now worth about 70 rubles, which only looks good compared to the absolute crisis earlier in the day.
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But at this point, it’s not clear that Russia has any good options left at its disposal to stop the ruble from tumbling. It could start unloading its own foreign currency reserves to stanch the bleeding, but as Jennifer Rankin of the Guardian argues, those could drain away fast. And such a move wouldn't fix any of the underlying problems that have pushed Russia to the breaking point.
The lesson, kids? It doesn't pay to be a dickhead dictator.
Like, literally. It doesn't pay.
http://www.slate.com/blogs/moneybox...putin_has_no_good_solutions.html?wpsrc=fol_fb