For Russia oil equals money, what if the money dries up before the oil does?

For most countries, the economic slowdown in China and the accompanying slump in commodity prices represent something between nuisance and pothole. For Russia, they are a catastrophe.

Russia’s currency and economy, already squeezed by Western sanctions, have been sent into virtual free fall by slumping oil prices. The IMF now puts Russia’s long-term potential growth at 1.5%. I personally think it’s just 1%, astonishing for a country whose standard of living is barely 40% that of the U.S.

Russia is indeed skating on thin ice: Cheap oil, Western sanctions and years of mismanagement have sent its economy into a deep freeze. Now everyone is wondering when the ice will crack.

Inflation has soared to 15%, the ruble is trading near record lows, consumer and business sentiment is on the slide, and its companies are shut out of financial markets in the US and Europe.

For More: http://us.wowcity.com/newjersey/pottersville/page_article/?id=7137

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