The Ruble
- Fred
- Aug 13
- 3 min read
A week before Russia invaded Ukraine, the US Dollar against the Russian Ruble was at 77.164.
Despite a roller coast ride, where Joe Biden threated to crush the ruble, if you take the long angle view of the Russian/Ukrainian Conflict, American sanctions mostly left the ruble unaffected. As word leaked out about a possible Alaska Summit, the numbers for the ruble were a very similar 80.452.
Since the Beijing Olympics ended in February of 2022:
Putin has defeated his number one domestic political opponent, Alexai Navalny: And when I say defeated, I mean had him killed. There is no longer a formidable, organized opposition to Putin within Russia.
Putin has emptied his jails and corralled under-educated males from the countryside: If Putin executed a million young men, he would have been called a monster. If he let's Ukraine kill them, his young soldiers died filling a nationalistic calling. Economically, it has been a boon for Russia, powering their miliary economic complex and pushing their unemployment to a miniscule 2.2%.
First Joe Biden, then the rest of Western Europe, lined up with "devastating" economic sanctions. Within 6 months, those actions were mostly negated. Nothing that The West did really mattered across that 5 year timeline.
You protest that Vladimir Putin is a dictator and my monetary analysis is simplistic? Well of course it is, we aren't CNBC, we're Beacon of Speech, a libertarian-leaning website that (mostly) focuses free speech issues.
We are very week on international currency funds.
But do you know how many dictators take control of a country and there's hyperinflation and double digit unemployment?
What's my point? Donald Trump has almost no leverage when he meets with Putin in a few days in Alaska. Russia can play the war of attrition with Ukraine for another 5 years. Ukraine cannot afford to play defense for that long. War fatigue is officially setting in.
Russia isn't setting the world on fire economically, but in the short term, the country is about as stable as Russia gets.
So when Donald Trump meets Putin in Alaska, all he can offer is Ukraine's Land and the temptation of real Russian growth if Trump lifts the monetary restrictions placed on Putin by Biden
If Trump threatens Draconian Sanctions, Putin will laugh, because didn't Biden do that already? If Trump gives away Luhansk and Donetsk, that doesn't really count, does it? He's not the President of Ukraine.
It's nice that Trump and Putin are meeting, because communicating is better than not communicating. But the meeting has the optics of a PR Moment for both men more than a spark that will end hostilities on the ground.
Why the pessimistic angle? Because no matter Covid or War, Sanctions or Restrictions, just 2 months ago:
Like it or not, the backbone of Russia is the ruble, the second-oldest currency in continuous use in the world. The strength and stability of the ruble has given Putin free-reign to push his economic agenda in the Eastern Hemisphere. You say the ruble is heavy manipulated by Putin and his cronies?
I'm sure it is.
But other world leaders have tried to manipulate their monetary systems and failed miserably.
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