By Royce Christyn
Your News Wire
So, today a global economy had such a tremendous crash that Apple halted all online sales, it threw the entire country in a state of frozen shock and will have global impact for years to come.
However, the main headlines today are about the fact that the Hollywood film “The Interview” was cancelled because N. Korea threatened to blow up movie theaters. While both situations are not good – perhaps not for the obvious reasons – Time magazine had some pretty strong words to say in an article titled:
“Putin Watches Russian Economy Collapse Along With His Stature”
Time went on to say:
The plummeting ruble may force the Russian President to rethink his adventures abroad
Stability was always the watchword of Vladimir Putin’s presidency, and for more than a decade it rang true. Ever since he came to power in 2000, Putin presented himself as the antidote to what Russians call the “wild ’90s,” the decade of economic upheaval that culminated in the crash of 1998. The high price of oil, and the fortunes it brought the Russian petrostate, have since allowed Putin to keep his promise of prosperity and economic growth. But this week the myth of Putin the Stabilizer collapsed, along with the value of the national currency.
Driven down by a six-month plunge in the price of oil, the ruble lost about a quarter of its value against the dollar in the first two days of this week, its steepest fall since the crash of 1998, when Russia defaulted on its debt. The central bank took drastic measures to avoid the risk of another default on Monday night, hiking interest rates from 10.5% to 17% in a desperate attempt to make Russians keep their rubles in the bank instead of spending them on foreign currency. But it came too late. The rate hike, also the steepest since 1998, only managed to forestall the collapse of the ruble for about 10 minutes when markets opened on Tuesday morning.
Putin, meanwhile, kept his head in the sand. Reporters who called his spokesman with questions about the ruble’s fall were told to call the Prime Minister or the Cabinet, as though the economy was not the President’s concern. The most notable item on the Kremlin’s website on Tuesday was a presidential order to prepare a “fundamental” history of the region of Crimea, which Putin annexed from Ukraine this spring. Though it was hardly a tonic for the national economy, this decree hinted at Putin’s plan for riding out the storm.