Monday Oct 13 2014
Bloomberg reports the Russian Ruble is falling with oil prices. Half of all Russia's revenue comes from oil. Oil just dropped 20%. Bingo Russian revenue just dropped 10%.
And the dollar is moving up which makes things just that much worse for the ruble.
Putin has shunned any pretext of a consumer economy in Russia. That would give manufacturers real power. It is much easier to control a commodity based economy centered on oil.
If you read my newspaper coumn or columns, you know I am fairly confident all of this will resutl in lower prices. Marginal economies like Russia nd Nigerai have no other sources of income. My guess is that they will expand output in to a lower price environment to keep cash flow constant. It won't be constant but that won't stop them from trying.
And so the price of oil is iikely to fall further.
Comments