Monday, October 6, 2014

Money, again

Yes, the ruble is collapsing. Especially against the dollar. 

Sept 2013, 31 R = 1$, now, 40 R = 1$. 

I didn't realize the US economy was doing better, but evidently it is. 

Did I mention we get paid in rubles?  Hired by a Russian university, we have no other options.  It is also illegal to "peg" any price or payment to a foreign currency amount.  But since 1999, that didn't matter, since the ruble was held stable by actions of the Central Bank, so that the ruble bounced around 30 R to 1 $ (29-33) for more than a decade after the 1998 default. But the central bank decided in 2014 to let the ruble "float", to not "prop it up", to not keep the exchange rate within certain bounds.  They have gradually been phasing out their "prop" so the ruble is falling like with gravity. 

Sanctions do not affect the ordinary citizens of Russia on the whole. Might be a few imported items not on the shelves, but there are no empty shelves (imports being replaced by domestic products), and not all imports have been affected (yet). 

However, internal inflation is also going up in Russia generally and in Moscow in particular. Officially the inflation rate (Aug 2013 to Aug 2014) is over 7.5%. But in the year we have been here, a lot of food, clothing, and other consumer items have increased by 10-20%. Including our rent. 

No one starves in Russia but the poor. I used to say Russia is a country where it's easier to be poor (than in the US). That isn't true in Moscow.

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