This is a fairly recent RoE quoted on the currency markets. The current Russian interest rate CBR (base rate) is 17%.
This situation (the currency slide) cannot continue for much longer without VERY SERIOUS repercussions.
Time, after time after time after time, this organ has stated (we are very sorry Dear Reader we are going to repeat it yet again): If you hand the government of your country over to a foreign power, what do you expect?
The above image is of The Right Honourable Philip Hammond PC MP Secretary of State for Foreign and Commonwealth Affairs. This is a man whose own folly has been compounded by the present perilous situation we are all in. Hammond is of course in breach of his Privy Council Oath and a Traitor having placed Her Majesty the Queen in breach of her Coronation Oath to govern us according to our laws and customs. By allowing the Lisbon Treaty to have effect in this land Hammond has in effect castrated himself for as a British Foreign Secretary his is now completely impotent to do anything about the present situation apart from heckle from the sidelines (if he was minded to – present indications show he is not so minded).
Hammond appears therefore to be unruffled by the present situation, probably wandering under the delusion that the current low oil price is good for the UK economy and therefore good for the Tories chances of getting a good result in May 2015.
If Hammond is thinking this then he truly is a complete idiot!
What HAS to happen and NOW is that the European Union must call off ALL sanctions against Russia IMMEDIATELY.
Of course were Hammond to wish to do this he cannot as the Sanctions against Russia are an EU Foreign Policy act and therefore the UK is bound by (unlawful) treaty to unreservedly support them!
Thus we have a situation where a British Foreign Secretary is completely powerless to do anything other than ask (very politely) the German chancellor to change policy!
Again the Editor has to apologise to you Dear Long Suffering Reader for having to explain the blatantly obvious as to just why the situation is so dangerous! For Hammond appears to be ignorant of the danger!
Russia’s problem (its rapidly depreciating currency) is due to the almost complete reliance of its economy on oil exports. Russia’s oil revenues are her principal source of revenue. With one exception, her economic output in other areas is minimal. The exception is in the area of defence exports: Russia is a MAJOR arms producer. Not only that, but Russia is a virtually self sufficient manufacturer of arms. What does this mean? This: That Russia not only can supply an aircraft (the Sukhoi Su-35 multi-role air superiority fighter for instance, below)but can supply all its components including the electronics and the weapons.
Russia’s income is falling (and with it the currency) because the oil price is falling. Were the oil price to cease to fall and rise, Russia’s problems would ease. Her revenue would increase, her currency would rise in value and the crippling interest rates could be cut.
What could cause such a reversal? An international crisis of course!
As well as her economic travails, Russia has a civil war occurring on her borders in Ukraine. Put very simply, the western Ukraine wishes to become a member of the European Union and have links with Germany and the eastern Ukraine does not wish to have ANY links with Germany but does want links with Russia.
Were Vladimir Putin (whose popularity in Russia is high) were to “up the ante” by direct Russian involvement in Ukraine it would put the cat among this pigeons so far as the European Union is concerned. Vladimir Putin knows that Angela Merkel will ensure that the EU does not become militarily involved. Since Russia supplies the EU with much of its gas a cessation of gas supplies will be an act of “cutting off the nose to spite the face.”
Since Russia is a veto holder at the UN Security Council, the USA is relatively powerless. Barack Obama is NOT going to risk direct military confrontation with Russia.
The danger is that Vladimir Putin, Angela Merkel and Barack Obama could well loose control of the situation. For those readers wondering why David Cameron has not been included in the list the answer is because as British Prime Minister he is irrelevant and of no consequence.
If Dear Reader you hear several distant rumblings it will be because such as Benjamin Disraeli, William Gladstone, Henry Asquith and David Lloyd George will be spinning in their graves aghast at the realisation that a British Prime Minister has been so reduced!