Russia’s economy could collapse in months, says Jewish financial forecaster

H/t reader squodgy:

“This is more sinister than at first thought.

The Russians under Vlad, are preparing for armageddon, whilst we sit idly by.”


Zionism

Russia’s economy could collapse in months, says Jewish financial forecaster (The Ugly Truth, Dec 27, 2014):

Jewish social media personality Slava Rabinovich’s apocalyptic visions of a crumbling federation may be quickly realized

ed note–if there were ever a ‘Cuban MIssile Crisis’ event that people needed to be worried about, it is now, with the deliberate acts of war being waged against a nuclear-armed Russia by America and the West out to do Israel’s bidding. Putin’s Russia is the ony substantive, credible (meaning nuclear) challenge to the status quo in the Middle East with its support of Iran, Syria, Hezbollah, etc, and all persons on planet earth concerned with life and limb need to understand that these acts of war being waged against Russia’s economy are not going to go ‘unresolved’.

With all of this taking place before the eyes of the world, how anyone with 3 functioning brain cells can still entertain the notion that Putin and Russia are just ‘playing their part’ in helping the powers-that-be achieve their NWO only underscores how mentally-deficient certain ‘neighborhoods’ wthin this ‘movement’ are.

Times of Israel

When Slava Rabinovich left the Soviet Union in 1987, 70 years of “planned economy” financial gridlock had made basic goods scarce and opportunities for an ambitious 21-year-old even scarcer. Although Gorbachev’s perestroika had started in January 1987 and sought to introduce gradual reform, daily life was an obstacle course with hours spent waiting in lines to purchase basic necessities.

As the country lifted restraints on free speech, nationalist forces — including vocally anti-Semitic ones — were unleashed. As Rabinovich packed his bags, he, like many Russian Jews, knew that whatever the future held in the United States, he was going to be more secure there than in Leningrad.

He came back to Russia in 1996. A freshly minted NYU Stern MBA, he was recruited by Hermitage Capital Management, a Russia-focused investment fund. Today he runs his own fund out of Moscow and in the last six months has acquired a near-celebrity status. But not as an investment banker.

Today Rabinovich is Russia’s most popular financial commentator — and he does it all on Facebook.

The banker-turned-media personality spoke to the Times of Israel from Moscow via Skype in a conversation that clarifies his political persuasions, his forecast for the failing federation and his worst-case scenario for Russia.

Sanctions lead to a crumbling Russian ruble

After Russia occupied Crimea in February 2014 and started encroaching into eastern Ukraine by proxy, the United States and the European Union introduced economic sanctions against the regime of President Vladimir Putin.

They hit hard.

In late July Rabinovich started writing about the potential impact of sanctions on the Russian economy and as Russia’s investment rating plunged, his Facebook popularity skyrocketed, going from 500 friends to over 40,000 followers by mid-December 2014.

On Facebook, Rabinovich explains what is happening in the financial markets in witty, often profane language. While most of his status updates are economic analysis presented in layman’s terms, many are political.

Rabinovich unequivocally states that Putin’s policies caused Russia’s current economic woes and calls for him to step down. He also vocally supports Ukraine’s independence in face of the Russian invasion, and criticizes the government in Kiev for procrastinating on reforms.

‘As we speak, financial markets and banking connections with Russia are being cut off’

His main claim – and a recurrent topic of his Facebook updates – is that international sanctions and its primary result, lost investor confidence, are progressively isolating the country from global financial markets, making Russian capital and assets toxic for investors.

“Over the last few years big international banks, HSBC and BNP Paribas among them, have paid close to $12 billion to the US government for breaking the sanctions imposed against Sudan, North Korea and Iran,” Rabinovich tells the Times of Israel. “Dealing with a country under sanctions is just not worth it, and as we speak, financial markets and banking connections with Russia are being cut off.”

Rabinovich says Putin and his advisers are driving the country toward a catastrophe. If the Kremlin keeps it up, says Rabinovich, Russia will experience a total economic collapse within months.

How have things become so dire?

“If you look at investment conferences as late as 2011, Putin used to say all the right things. He used to say, ‘Russia is number 140 on the list of countries in terms of ease of doing business. We know how to move it into the first 20.’

“When one heard these things, one wanted to get up and applaud. People did that, and I did as well. One used to think, even if they [the government] do 25% of what they are describing, Russia’s investment rating will be reviewed up,” he says.

“They did nothing of the sort though — they did the opposite,” he says.

Russian economy is almost entirely dependent on imports — and on high prices for oil, its main export. Falling oil prices, international sanctions and Russia’s counter-sanctions, including import bans, have made the Russian ruble tumble.

A year ago, 32 Russian rubles could buy one US dollar. On December 17, 2014, the rate was as high as 68 rubles to the dollar.

Russians have lost more than half of their disposable income since the beginning of the year. While many didn’t believe the sanctions and the resulting economic downturn would impact them, signs of crisis are now hard to ignore.

As you read this, Muscovites are shopping furiously to snatch up import goods before prices double. Some retailers review prices daily; others list prices in “conditional units” (listing in the more stable US dollar is illegal). Apple has stopped online sales to Russia altogether, saying the ruble is too volatile.

Putin and his close circle were trained in subversion and propaganda by the KGB, says Rabinovich, and do not understand the complexity and interdependence of international financial markets. As their anti-Western rhetoric and policies erode investor trust, Russia slides into Soviet-style isolation. Yet Russia’s economy today is so closely linked with the global markets that isolation will mean total economic meltdown.

This comes at a time when the federal government in Moscow is spending billions to prop up the falling national currency and as the Kremlin rapidly runs out of money, it is losing its grip on problematic regions such as terrorist hotbed Chechnya.

Rabinovich predicts that when the federal government will no longer be able to offer financial incentive to the regions, Russia’s feeble federalism will crumble.

Rabinovich’s worst-case scenario, however, is an outcast Russia in the world’s financial markets with Putin “clinging to power.” He says that unless Russia reverses its aggression in Ukraine, cuts out the nationalist, isolationist rhetoric, and undertakes judicial and economic reform, collapse will start in a matter of months in Russia’s outlying regions, especially in provincial one-factory towns.

In this scenario, when trade links with overseas clients and suppliers get cut, hundreds of thousands of people will lose their livelihoods. And when they go out into the streets, Moscow will drown the protests in “rivers of blood,” says Rabinovich.

Russia is a dangerous place for government critics but for some reason Rabinovich doesn’t seem concerned about his personal safety. He believes his email is monitored and phone conversations recorded, and while the wheels of his jeep were punctured on two occasions earlier this year, he downplays the danger, saying that he hasn’t noticed anything suspicious beyond that.

Rabinovich’s forecasts have so far been spot-on. He often ends his Facebook status updates by writing, “I am not saying what might happen. I am saying what will for sure happen.”

Even Slava Rabinovich would like to be wrong about Russia.

2 thoughts on “Russia’s economy could collapse in months, says Jewish financial forecaster

  1. From the story I have followed carefully since 2010, I will say it again, the US dollar is the one in danger of collapse, not the Russian Ruble.

    Back in the late 1980s I noticed Russia was dumping gold, and ventured the opinion they might be in trouble…..deep trouble. People laughed at me. A few months later, the USSR collapsed. Watching commodities can show you a lot.

    In Spring of 2010, Hugo Chavez launched a new type of economic system for his tiny organization, the South American Trade Alliance. It had 12 countries, including Cuba. Their total annual GDP was about $500 million, and it was so small, it flew under US radar.

    Chavez introduced the first electronic currency, the Sucre. For the first time, member nations could trade with each other, using their own currency, leaving the dollar out. The Sucre translated the value of each currency at the time of transaction, making conversion to any other currency obsolete.

    Russia and China, seeing the success and efficiency of such a system adopted an identical system for themselves, starting a trade agreement with each other, and building a world economy around it. It had become clear to the world the US would be no better under Obama than it was with the last clown, so the world was ready to move away from all things American.

    First, they recruited Turkey and Iran, much of South and Central America. The emerging economies of Africa joined their open basket of currencies. India, Japan, Switzerland, Canada, Qatar and other middle east nations started trading with them in private and grew to liking the system far better than petrodollars, as OPEC showed about a month ago. Australia and New Zealand dumped the dollar in 2013.

    Last Summer, Russia and China went public with this trade system they started back in 2010 promoting their DE-dollarization system. Then, BRICS was formed, named after the leading countries of their new economy, Brazil, Russia, India, China and South Africa. There are several other members I cannot recall, but BRICS now includes much of the earning world.

    The US has become known as a rogue nation due to their war policies, treatment of prisoners, disregard of any responsible rules of being world reserve currency, and replacement of diplomacy with bullying. They have not earned a cent in years, have been happy to print money nonstop to cover their losses. Not only does the US attack nations that have done nothing to them, they steal their resources, and give the resources to their greedy gut friends. All the US gets are the bills and the costs………………not one cent of the profits go into the US treasury. This is economic suicide.

    As less nations use the dollar, the US is now sitting on piles of worthless paper money nobody wants. They have printed far more than they can ever honor. They just passed a law allowing banks to gamble with FDIC funds! But, they continue to cut taxes for their greedy gut friends and corporations. The economic suicide policies are beginning to be felt everywhere.

    90% of all transactions on the US stock exchange are high frequency skim and sell. The key is sell. Money goes out, nothing comes in, but they claim the volume of sold shares as market health, regardless not one cent goes in. A market that goes up so radically is obviously rigged and very crooked. At some point, it will collapse, possibly taking the dollar down with it. I do know we have a world of 196 nations. Some are too small and backward to count. However, even deducting 25% of them, the US is still getting a failing grade for allies.

    The US has two allies outside the EU, the Saudis (US troops keep the kings on their thrones), and Israel (everyone hates them). That is a losing score any way you play it.

    CEOs of major corporations are buying back stock using borrowed money as a final screw to the shareholders. The biggest one is Apple, and I know entire communities have changed their rules so they could buy Apple stock to meet their pension requirements. Are they in for a fall!

    And Russia’s currency is going to collapse? Russia is making money, and at last review, the US is the #1 oil producer of oil, not Russia, and Russia has many other natural resources to draw upon…..the US industrial center has been gutted. There is nothing left here anymore, except for a few small pockets of profit.

    Jobs continue to vanish at over 300,000 a week…………………and Russia’s currency is going to collapse?

    The clown who wrote this is being paid…………by American bankers.
    The truth is that the US dollar is only staying afloat thanks to the EU.
    The EU has 28 member nations. At least half of them are in financial trouble, and need more money.

    BRICS has set up a large fund equal to E100 billion to loan funds to smaller nations who need money and don’t want more US financial domination. How long before one or more EU members go to them for a bail out? It is but a matter of time. Once the US dollar loses the EU, it will collapse. Nobody else uses it, the entire concept of a world reserve currency has become obsolete.

    So, that writer needs to look more carefully at what he is writing, starting with a clear exam of the US markets, the growing strength of BRICS, the falling real value of the US dollar, and some other things. The most essential thing he ought to remember is that a currency is used by each country in line with national wealth to back it. The US sure has not followed that rule, while Russia has been stockpiling gold for the last several years.

    Then, the last reason I would not bank on the Ruble collapsing can be found on usdebtclock.org. If you go to the page, click on world, you will see the debt level of many world economies. China’s is so low that it is laughable, but they lie about everything. But, Russia is now down to 32% of GDP, it was 33% last year. I don’t know if the clock reflects that change yet, the story came out about a month ago.

    US debt to GDP 99%.

    So, who would you bet on?

  2. Dear Marilyn, I am following you now and then, it seems you are well informed. For a long time I thought fortunately I am living in the EY but now its turned into unfortunately I am living within the EU, hoping that not too much naïve politicians will take over Bruxel or have already taken over. They still want us to believe that Russia is on the edge of a collapse due to the sanctions. Also I believe that there are some EU politicians dreaming over a great empire reaching from the north pole to africa, from the north sea into russia under the flag of being a humanitarian empire for the frist time in history. What they don’t want to think of is that worldwide people have been waiting and are waiting for a weak EU and/or USA for historical reasons. As I read is that Ayn rand had or still has a great influence in the USA, a radical vison how society has to be organised, in an opposite way the russian society was organized. I would not be surprised if the USA will collapse sooner than one can expect.

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