Russia's banal reality lies in between energy superpower and bankrupt state(dollar being hoarded)

Telegraph ^ | 11/17/08 | Ambrose Evans-Pritchard

[TigerLikesRooster]

Russia's banal reality lies in between energy superpower and bankrupt state

Russia has been losing $10bn in foreign reserves a week since it snatched South Ossetia and ramped up the new Cold War with nuclear threats.

By Ambrose Evans-Pritchard

Last Updated: 3:47PM GMT 17 Nov 2008

A fifth of the Kremlin’s fire-fighting fund has gone before the economic crisis even starts. Would the Medvedev-Putin duo have provoked the West so nonchalantly had they known that global recession would soon cut the price of Urals crude oil to $49.35 a barrel, knocking away the chief prop of Kremlin finance and Russian power?

The pace of capital flight quickened last week to $16bn after a botched mini-devaluation by the central bank. Tinkering with currency bands is hazardous in a country where memories of the 1998 savings wipeout are still fresh.

The Kremlin already faces a run on Russia’s banks as depositors rush to switch their roubles into dollars, despite the $200bn financial rescue package. Russia’s Globex bank suspended withdrawals by depositors on Wednesday. Kommersant newspaper reports that the deposit loss from rouble accounts reached 54pc at Sobinbank in October, 27pc at Globex, 25pc at Raiffeisenbank, 24pc at Unicredit, and 22pc at Alfa.

[TigerLikesRooster]

The Kremlin already faces a run on Russia’s banks as depositors rush to switch their roubles into dollars,

Such a short-lived glory of Putin, the Vampire of Moscow.

[TigerLikesRooster]

Ping!

[babble-on]

Hugo Chavez will be the first to fall. His grip on power is far far weaker than Putin’s. Putin himself is not going away, though Russia might be less powerful in a 50 dollar a barrel world.

[Leisler]

"Somewhere between yesterday’s inflated talk of Russian riches and today’s talk of Russian bankruptcy lies the banal reality of a mid-ranking nation, run by a dysfunctional elite, with the worst aging crisis in the Western world, that happens to be sitting on a lot of resources."

For the elite, it functions quite well. Just like Zimbabwe, or Michigan, or Chicago. There is no ill wind that a political elite can not personally profit from.

[Humble Servant]

Someone educate me: this strengthens the dollar, right?

[TigerLikesRooster]

Right.

[happygrl]

Somewhere between yesterday’s inflated talk of Russian riches and today’s talk of Russian bankruptcy lies the banal reality of a mid-ranking nation, run by a dysfunctional elite, with the worst aging crisis in the Western world, that happens to be sitting on a lot of resources.

The Chinese will be interested.