analogbear5 said:I see this being posted on every single page—so I guess I'll go through the motions again.
The ruble's price since March isn't driven by the market—it's the Russian central bank pulling the strings with strict trade controls. It's basically just capital control.
The ruble looks strong because there's massive demand for it—every exporter is forced to buy it up.
On the flip side, importers in Russia aren't looking for euros or dollars because imports have absolutely cratered due to sanctions.
So, the exchange rate doesn't mean the world is suddenly dying to invest in Russia—it just means the Russian central bank is forcing it to stay at this level to try and keep inflation in check.
Plus, a strong ruble eats into export profits, meaning they'll eventually need even more euros and dollars just to plug those budget holes.
The world has indeed developed a hunger for investing here because every broker out there is advising people to go long on the ruble. In fact, those savvy enough to move when the ruble initially tanked at the start of the conflict have already pocketed massive profits now that the value has surged 40% against the dollar. Current projections suggest it will continue to climb through year-end. Even Bloomberg is reporting that the ruble is currently the most attractive currency on the market for investors, and many are already moving in to further stabilize its rise in anticipation of significant returns. It appears that the NATO sanctions have achieved precisely the opposite of what they were intended to prevent. One can only wonder what sort of inept politicians our nations have seen fit to elect. Compared to the scale of this, Alan Ford is practically a child.
Regarding the other matter, the purchasing power of the average Russian is essentially equal to that of the average German. This implies that the typical German possesses the highest purchasing power among all European states. Therefore, Germany, Russia, and Indonesia share similar per capita purchasing power, while China, Japan, and India hold much higher levels compared to Europe, Asia, or Africa. That is where the entire argument begins and ends.
It seems to me that uneducated individuals want to believe Russia is some destitute backwater inhabited by lunatics, yet the reality is quite different. For instance, the USA actually has a higher poverty rate than Russia does.
If the average Russian enjoys the same purchasing power domestically as the average German, it signifies one thing: they will endure these sanctions just as long, if not longer, than the rest of the European states. Those other nations, being poorer and having citizens with significantly lower purchasing power, will begin to fall like dominoes—and they are already starting to feel the impact. Germany, however, if it falls at all, will likely be the last to go. The reason Russia might emerge from this considerably stronger is simple: unlike Germany, Russia possesses nearly every essential resource on the planet and can easily provide warmth and food for its people. As for Germany... we shall see how they manage with the most expensive logistics chain in the world just to secure oil. I can already envision the price of a gallon of gasoline in $8.25 by the end of the year. When prices hit $6.75, we will see gas stations, mechanics, tire shops, vehicle rentals, and the entire transport sector beginning to collapse. Yet, our esteemed politicians insist on learning from their own mistakes—mistakes that we are ultimately forced to pay for. 👍
If the average American had the purchasing power of a Russian, well... we would be a different kind of superpower. But no, we live in a place with the costs of a developing nation but the price tags of the USA. It is a grim reality. 👍
