'Putin has the last laugh': Russian ruble rises, sanctions not working as expected
On June 20, the Russian ruble rose to $55,47, the highest gain since 2015. While many have dismissed the ruble's exchange rate, Charles Lichfield, deputy director of the Atlantic Council's Center for Geoeconomics, published an editorial titled "Don't Ignore the Exchange Rate: How a Strong Ruble Can Protect Russia," reports Bitcoin.
Recent reports have detailed that the Russian fiat currency, the ruble, has been the best-performing currency in the world, and the articles have explained that US economists have been puzzled by this trend.
The Russian ruble is growing
The financial sanctions against Russia do not appear to be having as much of an impact on the transcontinental country as the Western media has portrayed over the past few months. On June 20, the Russian ruble peaked against the US dollar, the highest gain since 2015. There have been many reports from economists and analysts saying that Russia's financial statements are fabricated and much of the ruble's appreciation is just smoke and mirrors. One YouTuber claims that while the ruble looks strong, much of its strength is backed by manipulation.
Youtuber Jake Brough told his 146 subscribers that “the Russian economy is currently in decline, inflation is high, unemployment is rising, wages are falling, the GDP of the Russian economy is collapsing.” However, Brow's arguments could also apply to the United States, as the US economy appears to be heading into recession, inflation is the highest in 000 years, US jobless claims have risen due to declining productivity, and the economy's GDP The US contracted significantly in Q40 1.
Brow says the Russian government and central bank are manipulating the situation, making the ruble look strong. However, it is possible that US politicians and the Federal Reserve could also be accused of manipulating and spreading misinformation. Other reports that do not use Broe's biased thesis indicate that sanctions against Russia have failed miserably. A report published by armstrongeconomics.com says the boycott of Russian oil is not working and "Putin has the last laugh as he now sells more oil at a higher price."
Armstrongeconomics.com author Martin Armstrong added: “In April, Russian oil exports rose by 620 bpd to 000 million bpd. India (+8,1 bpd) and Turkey (+730 bpd) helped offset the international embargo, while the EU remained the largest importer despite a sharp supply cut. The IEA reported that Russian oil exports grew by more than 000% year-on-year during the first four months of the year – the boycott fully reverberated in the West and helped bolster the Russian economy.”
Oil sanctions could backfire
In addition, Russia is hiding its financial transactions as the country announced that monthly government spending data would no longer be released. Russia's finance ministry told the press that the country needed to "minimize the risk of additional sanctions." Many countries do not comply with Western sanctions and buy oil from the Russian Federation. For example, India reportedly receives oil from Russia and after the oil is refined, the country sells it to Europe for profit.
New Delhi: India is importing crude oil from Russia & re-exporting it at much higher prices to US, France, Italy & UK. – CREA report shows.
— South Asia Index (@SouthAsiaIndex) June 14, 2022
China also buys oil from Russia, and a number of refineries are forced to buy oil from the transcontinental country. For example, Italy's largest refinery, ISAB, was forced to ship crude oil from Russia as banks stopped lending to the company. China has been the largest buyer of Russian oil since 2021, and data shows the country receives an average of 1,6 million barrels per day from Russia. Meanwhile, oil is running low in Europe as warnings suggest Britain could face massive power outages. Financial newspaper the Economist insists that Europe is suffering from a "serious energy price shock."
The inconvenient truth those citing Russia's GDP size fail to grasp:
If we subtract Russian energy from the mix of global energy supplies, global oil & gas prices will quickly spike to levels that collapse the entire global economy, & USD-centric debt markets & financial system. pic.twitter.com/dZiEaZXh3H
— Luke Gromen (@LukeGromen) -
What's more, two weeks ago, Charles Lichfield, deputy director of the Atlantic Council's Center for Geoeconomics, published an editorial stating that people should not ignore the ruble's exchange rate. Lichfield's article says that Western governments have argued that the Russian economy will eventually collapse, but he believes the situation needs to be reassessed. “The Russian financial system may have weathered the initial shock — but falling gross domestic product (GDP) and catastrophic resource shortages, they argued, would force Moscow to eventually de-escalate as the war entered a grueling phase — but it’s time to reconsider this position,” Lichfield wrote.
Russia's economy will fail as a result of their "war". They will not be in a bargaining position soon…. Just kick out their diplomats. https://t.co/Yx2Bn4ACaa
- J Burgess - I am what I am. (@Gooddem4ever) April 5, 2022
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Government officials predicted that energy sanctions could backfire and not necessarily work. During an interview in May, European Union Commission President Ursula Von Der Leyen outlined the implications of energy sanctions. Von der Leyen said that if countries “immediately” imposed sanctions on Russian oil imports, Vladimir Putin “could take oil that he does not sell to the European Union to the world market, where prices will rise and he will sell it for more.”
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