The ruble is collapsing

In 1998, I traveled to Moscow for the first time to teach in a summer course at the Russian Academy of Sciences. The week before, we were on vacation in Colorado and I heard on the radio “Today, the ruble lost 100% of its value.” That meant that the ruble was worthless, which seemed unlikely. Indeed, the next day, the announcer apologized and said she meant to say that the ruble lost 50% of its value.

In the event, by the time I arrived at the Hotel Sputnik in Moscow, all the cash machines in the city were shut down. Restaurant prices changed hourly during my five-day stay, and there were sidewalk signs posting exchange rates that were written in chalk so they could easily be edited. Certainly, puts our recent experience with inflation in perspective.

Over at jabberwocking.com, Kevin Drum notes that the ruble is down 30% relative to the US dollar since the war started and 20% just since September.

From the comment thread:

“The problem with the Russian economy at this point is that it is basically producing nothing except military supplies for the war and even then they’re still having to import tons of weapons and supplies from Iran and NK. Most Russians have seen a marked deterioration in their standard of living the past 2 years. Some 150,000 young men have been killed and hundreds of thousands more injured or disabled. There’s a real possibility of a major economic-political crisis in Russia when the war ends and hundreds of thousands are thrown out of work or discharged from the army with no civilian economy to return to. A lot of foreign aid will pour in to reconstruct Ukraine, but Russia (and the eastern provinces it has annexed that have been turned into a moonscape) will get nothing and even if some sanctions are eased, things probably won’t go back to anything resembling normal as long as Putin is in power.”

When the USSR collapsed, Francis Fukuyama declared the end of history. History, it seems, has other ideas.

The ruble loses 20% of its value