On October 10, the Central Bank of Russia announced that it would raise its benchmark interest rate from 31% to 8%. In other words, it raised interest rates by 9.5 basis points all at once. What this means means that the Central Bank of Russia has done what should be done three times at a time.
Although the interest rate hike is three times the market expectation, and this is the fourth time that the Bank of Russia has raised interest rates this year, the rouble's performance is still disappointing: it has only been tough against the dollar for 3 minutes, and then turned around and ran away. At the close of the day, the ruble fell 2% against the dollar, the biggest drop in three years. Obviously, the foreign exchange market sees the ruble rate hike as a good opportunity to escape.
The reason why Russia raised interest rates was mainly in response to the sharp depreciation of the ruble. After the Crimea incident, Western countries imposed economic sanctions on Russia, and the noose was gradually tightened. Russia has obvious structural deficiencies in the economy. It is highly dependent on oil and natural gas exports. It has low self-sufficiency rates for light industrial products and food that are closely related to the lives of ordinary people, and its manufacturing industry lacks competitiveness.
If it is at odds with the West during the commodity bull market, Russia will definitely stand in the upper hand. Helpless now that the U.S. economy is recovering strongly, the U.S. dollar is beginning to go bullish, coupled with the advancement of new energy technology, Russia has lost its advantages, not only standing in the "downwind", but also standing on the hillside, watching the U.S. and the European Union stand high. Roll the stone down.
Most oil-producing countries in the Middle East, North Africa, and Latin America are basically controlled by the United States. We have seen that Saudi Arabia has stated that it will not reduce production and insure prices, and the major US investment banks have already let go: In order to ensure market share, Saudi Arabia might have to increase production! This, you know. (This article is Liu Xiaobo’s original work. When reprinting this article, you need to sign "Liu Xiaobo" before the main text and indicate "Reposted from the WeChat public account "Everyday Said Money" (tttmoney)", otherwise it will be regarded as infringement.）
Sun Tzu said: "Going to the army and attacking the plan, then the diplomat, and then the army." These words are profound, but not comprehensive. In fact, there is another level above the "plan" called "potential." The so-called "power" is the national power and the comprehensive strength of the country. Behind the comprehensive strength is the system and the technological advantages derived from the advanced system. Sun Tzu once said, "A soldier who defeats others without fighting is also a good one." How can this be achieved, of course, depends on comprehensive national strength.
The reason why the United States can play the world on top of applause is because of its strong national strength. I have said many times that after the financial crisis, the United States has achieved a phoenix nirvana and the growth pattern has changed. Before the financial crisis, the wave of growth in the United States mainly relied on financial innovation and increased leverage brought about by derivative financial instruments. After the financial crisis, this model was abandoned, but the United States successfully started a new round of industrial revolution: new energy revolution represented by shale gas and shale oil, information technology revolution represented by mobile Internet, and 3D printing as representative Manufacturing revolution. And a large number of world-class companies have emerged, such as Google, Apple, Tesla, Facebook and so on.
With "potential", "scheming" will come naturally: the dollar appreciates and oil prices fall. Then there is the "commission". After the Afghanistan War and the two Gulf Wars, most oil-producing countries only looked ahead to the United States, and basically responded with one hundred responses. In fact, this situation has long been there. I wrote an article "Putin Can't Play a New Cold War" on March 3 this year. If you are interested, you can check it out on my Sina blog.
The ruble has depreciated by 20% this year. It is this uncontrollable devaluation that has caused domestic residents to lose trust in the ruble and have a strong desire to hold foreign currencies and physical objects. Ordinary residents are restricted from exchanging foreign currencies, and everyone begins to store physical objects, which leads to high inflation.
The interest rate is the price of funds. Raising the interest rate will naturally help support the currency's value. When the currency is valuable, everyone will not rush to buy things. But the problem is that a substantial increase in interest rates will greatly increase the cost of enterprises and harm the real economy. The failure of the real economy will also lead to currency depreciation and panic buying. To say a thousand words and ten thousand, without the support of a strong economy, it is difficult for Putin to win the war of attrition with the West. The Soviet Union was consumed by the United States. Now the United States still uses this method to deal with Russia: like porridge, take it slow. Fighting directly with your hands is the courage of one man and the risk is great. What the United States pursues is a "soldier who does not fight."
Russia's economic strength is roughly equivalent to "Guangdong + Jiangsu". It is indeed difficult for Russia to compete with the EU, the United States, and Japan with such a total amount. If nothing else, Putin's toughness will not survive 2015. In the middle of next year, at the end of the year at the latest, we will see a smiling Putin head towards Europe and America.
As for us, let's do what we should do. Anyway, oil prices are falling and the commodity market is sluggish, which is good news for China. Dollar appreciation? We have a wall of foreign exchange control, and we can deal with it through RRR cuts and interest rate cuts. The problem is not big, so don't worry too much.
Talk about money every day