Russian Ruble Supported by Death and Deception
The recent gyrations of the Russian ruble have shown us that a wide range of factors must be considered when attempting to predict where the value of a currency will go. But the standard reality rules may not be an influence. However, it is possible that the conventional laws of reality will not have an impact.
Years of study into financial crises have also taught me that hard-working individuals often bear the brunt of the consequences... savers... taxpayers... those who "abide by the rules" endure the brunt of the penalties. Subscribe to my newsletter, Strategic Investment, to keep informed.
When it comes to currency markets, many investors who focus their attention on the stock market may feel like they are playing catch in another dimension, where the rules of nature don't make sense, and reality is topsyturvy.
In contrast to typical equity markets, currency markets are subtly influenced by economic fundamentals. Most of the value of a currency is decided by arbitrary manipulation on the part of central banks and governments.
As the recent gyrations of Russia's ruble have demonstrated, the set of variables that must be evaluated to forecast where a currency's value is headed includes monetary variables, such as interest rates, and variables relating to government policies across the board, including fiscal policies.
As a result, there are a lot of problems to solve. Consider the following scenario: if Russia embarks on a more aggressive campaign of war crimes, would it be predicted that the ruble's value would rise or fall in value?
Russian President Vladimir Putin denied involvement in a missile attack on a railway station in Kramatorsk, Ukraine, that killed at least 50 people.
Women and children account for the majority of the population.
The possibility that North Korea may claim credit for this specific tragedy does not seem to be out of the question. Alternatively, Moscow might blame the Ukrainian government, claiming they were only following their playbook from Syria. However, despite Russian protestations to the contrary, a UN committee examining atrocities committed in Syria convicted Russia of direct complicity in war crimes for its widespread bombardment and indiscriminate bombing of civilian areas.
The Independent International Commission of Inquiry on Syria's report focused on events in July and later that year, including assaults by "pro-government troops" on civilian targets such as medical institutions, which resulted in the displacement of 700,000 residents from their homes.
According to the inquiry, Russian planes were actively engaged in the bombardment of civilian areas in two cases, which found "strong proof" of this.
The panel has raised the possibility of Russian involvement in war crimes in the past, but this is the first time it has discovered concrete evidence of Moscow's involvement.
Following in the footsteps of World War II's crimes and horrors, several commentators, including British Prime Minister Boris Johnson, have likened Russian President Vladimir Putin's recent acts to German tyrant Adolf Hitler. I believe that a parallel between Putin and Italian dictator Benito Mussolini is a more appropriate connection to make. My assessment of Putin is that he has become a kind of knockoff version of Mussolini.
Both men seem to have been compelled to assume the role of the international bully to alleviate an inferiority problem they were experiencing. Putin appears to be dissatisfied with Russia's diminished stature as a global force due to the Soviet Union's disintegration.
On the other hand, Mussolini was hell-bent on nothing less than the restoration of the Roman Empire.
Putin, like Mussolini, is "ready to risk world censure" by authorizing the use of poison gas (in Syria) and other war crimes, "including the bombardment of ambulances, hospitals, and civilian sites," as well as the deployment of chemical weapons.
Unless you are an expert on war crimes, you are likely unaware of the horrors authorized by Mussolini when Italy invaded Ethiopia almost 90 years ago today.
During the Italian-Ethiopian War, historian Alberto Sbacchi wrote a book titled "Poison Gas and Atrocities in the Italo-Ethiopian War," which detailed this heinous chapter in modern history.
On April 3, 1928, Mussolini was ready to risk world censure by sanctioning the use of poison gas to hasten the conquest of Ethiopia, even though Italy had signed the 1925 Geneva Protocol prohibiting the use of asphyxiating chemicals during the war. The use of chemical weapons by the Italian army enabled it to achieve its ultimate triumph by wearing out the Ethiopians and destroying their desire to fight.
In addition to violating the 1925 gas protocol, Italian soldiers also broke other international treaties by attacking Red Cross ambulances, hospitals, and civilian sites without restriction..."
Putin is Mussolini in a pair of sweatpants.
Mussolini, rather than Hitler, was more enthusiastic about the employment of poison gas in warfare. Despite the fact that his use of poison gas on humans in Nazi death camps was one of the darkest atrocities in history, Hitler was adamant about not deploying poison gas in battle situations.
It was estimated that the budget for war chemicals in Italian East Africa was 100 million lire, which included 75,000 gas masks for the army, many thousands of poison gas bombs made of yperite, and 75,000 artillery rounds laden with arsine gas.
The Washington Post noted that some historians believe Hitler's hesitation to commit genocide may be traced back to his own experience as a soldier during World War I. Hitler was caught in a mustard gas assault near Ypres on the night of October 13-14, 1918, and was briefly blinded as a result.
Soon, it is possible that you may be "temporarily blinded" while attempting to read the ruble's value. Don't be like that. The Russian authorities will likely suffer major repercussions if they default on their foreign debt. The Russian stock, bond, and currency markets all crashed in 1998 due to the country's default on its debt.
In this round of interest rate negotiations, the Russian Central Bank may decide to reduce rather than increase rates.
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