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Russia near economic collapse?
Posted by: McQ on Monday, November 24, 2008

Fifty dollar a barrel oil certainly isn't helping the situation:
The fall in oil prices from $147 this July to below $50 today has blown a gaping hole in the government's budget calculations. It is now facing a $150bn shortfall in its spending plans - and will have to slash expenditure in 2009.

Today Putin sought to assure hard-up Russians that their social benefits would not be affected, promising a $20bn assistance package. "We will do everything, everything in our power ... so that the collapses of the past years should never be repeated," he said.

The oil slump, however, exacerbates Russia's already severe economic problems. Since May Russian markets have lost 70% of their value. Russia's central bank, meanwhile, has been spent $57.5bn in two months trying to prop up the country's ailing currency.

"If the current trend continues with the government supporting the rouble, oil prices falling and a slowing economy we are going to have a major crisis," said Chris Weafer, an analyst with the Moscow brokerage Uralsib.

He added: "There will be more pressure on the rouble and an extremely difficult first quarter next year." Russia was more vulnerable than other countries because it was still an oil state, and had failed to diversify its economy, Weafer added.
Of course Putin, et. al, continue to blame their problems on the US financial crisis. Apparently invading Georgia and scaring investment out of Russia had little to do with the situation. Weafer buys into the US crisis being the trigger, but the Russian problem is structural, not the result of someone else's crisis:
"In terms of the trigger Putin is correct. The bomb came from the US," Weafer said. He added, however: "The shockwaves have hit a much weaker structure than the [Russian] government has acknowledged. The economy is going to hell in a handcart."
And just like those trying to avert or soften the crisis here, it is apparent that Putin and company don't have any more of an idea of how to address the problem than do our "leaders".

The question is, even as "unfriendly" as Russia has become under Putin, what would become of Russia if, in fact, it should suffer an economic collapse? It's past authoritarian history and it's recent tendency to again embrace authoritarianism (under the guise of a democratic process) might find the replacement to be worse than Putin, and perhaps, even more aggressive.
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Previous Comments to this Post 

Should Putin fall, what is the probability of any one particular person or faction taking control? Is there one that’s powerful enough (say by controlling the military) to do so? Or is it more more likely to disintegrate into a free-for-all?

Written By: Achillea
URL: http://
I bet it sure kills his soviet resurrection plans.
Written By: capt joe
URL: http://

Russia did not invade Georgia. It is the Jews meddling again, and using the U.S. to do their dirty work. Sloppy work!
Written By: dogismyth
URL: http://
Rouble? Shouldn’t that be spelled Rubble?
Written By: M. Simon
It is the Jews meddling again, and using the U.S. to do their dirty work.
And the seig heil wing weighs in.


Written By: McQ
I don’t know if I agree that Putin will fall from power.
I figure he’ll institute some "temporary" measures that just happen to ensure that he is in charge. And if he needs the military to "restore order" because of the "US caused" financial meltdown, well, he’s just doing it for the good of the rodina.

Tsar Putin I is not going to step down easily.
Written By: Veeshir
URL: http://
i think Putin is seeing this as 1917 and he sees himself as Lenin. He’ll need a fall guy, though, and an external Czar serves his purposes just as well as an internal one would.
Written By: Joel C.
URL: http://
Medvedev would make a nice fall guy.

But, as can be seen by our charming drive-by commenter above, Putin I is not above blaming all ills on Bush and/or the Jews.

I hate be a contrary cuss (well, not hate so much as keep finding myself doing it), but I don’t think he’s a sieg heiler above.

The Russians, like all European countries, have a long history of pogroms and Jew-hatred.
Written By: Veeshir
URL: http://
Is dogismyth a parody? It’s impossible to tell anymore. We need a turing test for lefties.
Written By: Achillea
URL: http://
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Written By: 2

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