Nov 20, 2008

There Will Be Pain

Speaking to high-end consumers in Moscow, “Supreme Leader” Putin promised that his team "will do everything, everything in our power ... so that the collapses of past years should never be repeated in our country.”

To be fair, Putin has made a rather hasty conversion to this re-form business after a decade of blasé diversification efforts. For example, the energy has sector still comprises roughly 30% of Russia’s economy, just as it did the last time oil prices collapsed and the “Asian Economic Flu” prompted the economic crisis.

No word yet on how Putin will make good on his promise. Finance Minister Alexei Kudrin has already warned that the government will likely have to hit up the Stability Fund to keep the budget balanced next year. Meanwhile, Russia burned through yet another $21.9 billion last week to prop up the ruble.

And to think, Putin offered just this year that the ruble should be the world’s new reserve currency. Maybe so, but for now, everyday Russians are hording dollars in the mattress.
Good times.


Ern said...

Why does everyone hoard money in their mattresses in Russia? That's the first place a robber is going to look. Diversify!

Pirates(and)Diplomats said...

Because keeping money on the window ledge is bad luck, for some crazy reason.