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If the Russian people can't convert their Rubles to USD/Euro or buy products outside their country, does it really matter? Like, sure if they bought something o

If the Russian people can't convert their Rubles to USD/Euro or buy products outside their country, does it really matter? Like, sure if they bought something overseas it might cost twice as much as before, but that does not necessarily imply that you have to adjust prices for products inside of Russia, as everyone still functionally has the same amount of money. Of course, this is without talking about all of the effects from being cut off from the global supply chain, which will certainly cause chaos on an economy. I guess what I am ultimately asking is, did the Ruble lose value, or did every other currency that isn't a Ruble gain value? Does the currency conversion rates actually represent purchasing power of currencies?

whatshisface 5y ago
Assuming this is the actual price of RUB, and not an artifact created by the illiquidity of RUB on sanction-impacted "retail investor" markets while the real money changes hands elsewhere (I have no reason to believe that, I am simply listing every possible scenario), this will stick around until long after the war is over. >I guess what I am ultimately asking is, did the Ruble lose value, or did every other currency that isn't a Ruble gain value? Foreigners with dollars will compete with Russians with rubles to buy local Russian goods, unless Russia disconnects itself from global trade. This will impact local prices, even the prices of raw natural resources, because the world is all one big market (unless Putin discovers the Juche Idea - but beware, even North Korea, one of the most isolated states on Earth, sells natural resources to China at prices at least somewhat tied to commodities markets.) Anything that involves imports to produce (this is a bigger category than you think, Russia does not make its own oilfield or farm equipment!) will be impacted even more inevitably. Things like Russian real estate could remain steady in RUB denominated price if Europeans are not allowed to compete with Russians to buy it, but wheat, tractors, things like that are going to become twice as expensive almost inevitably. Fortunately that will be counterbalanced by everyone's wages doubling (foreign firms compete with each other to hire Russians) unless, again, Putin disconnects from global trade. In that case, the biggest problem will be the availability or lack thereof of goods at any price.

whatshisface 5y ago

Assuming this is the actual price of RUB, and not an artifact created by the illiquidity of RUB on sanction-impacted "retail investor" markets while the real money changes hands elsewhere (I have no reason to believe that, I am simply listing every possible scenario), this will stick around until long after the war is over. >I guess what I am ultimately asking is, did the Ruble lose value, or did every other currency that isn't a Ruble gain value? Foreigners with dollars will compete with Russians with rubles to buy local Russian goods, unless Russia disconnects itself from global trade. This will impact local prices, even the prices of raw natural resources, because the world is all one big market (unless Putin discovers the Juche Idea - but beware, even North Korea, one of the most isolated states on Earth, sells natural resources to China at prices at least somewhat tied to commodities markets.) Anything that involves imports to produce (this is a bigger category than you think, Russia does not make its own oilfield or farm equipment!) will be impacted even more inevitably. Things like Russian real estate could remain steady in RUB denominated price if Europeans are not allowed to compete with Russians to buy it, but wheat, tractors, things like that are going to become twice as expensive almost inevitably. Fortunately that will be counterbalanced by everyone's wages doubling (foreign firms compete with each other to hire Russians) unless, again, Putin disconnects from global trade. In that case, the biggest problem will be the availability or lack thereof of goods at any price.