I really don't know if those troops will invade Eastern Ukraine. However there is in my opinion the danger that Mr. Putin thinks the following: If Russia faces increasingly tough sanctions over the annexation of the Crimea anyway why don't add two-three other Ukrainian oblasts to the motherland?
Donetsk and Luhansk have a relative large amount of ethnic Russians and could provide some useful local speratists. They have been already invaded by payed Russian thugs. It gets even better. Today we hear reports that Russia is using the killings by it's thugs to remind the world of it's 'duty' to 'protect' it's 'compatriots' in the political turmoil Russia itself is creating. Amazing stuff, as a Western FM I would have a very hard time not to laugh into Lavrovs face.
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A quick look at the situation of the Ruble. According to this site (translated by google) the Bank Rossii has used another $ 6bn to row against the flow and still it got overall pushed back against it's currency basket. This makes at least $ 21 bn + a 150 points interest rate hike in two weeks and the ruble goes from all-time low to all-time low despite over a 600 points premium against the Euro and USD.
Roughly two weeks ago:
I have no time to calculate the exact numbers but here is no doubt that although the war chest is relatively large it is under considerable pressure and liquidity is flowing out. I would not be surprised if tries to sell some securities of the SWF and gold to get more cash, and there is of course the interesting question what and at which cost the fund did buy. If the carry the investments at market price it is likely that those will have gone down, reducing the size of the war chest.Russia’s foreign reserves have fallen $40 billion since May to $493 billion, according to data through Feb. 21. ING said the country’s “net” war chest, excluding its sovereign wealth fund, gold and International Monetary Fund reserves, is about $270 billion. Allowing for funds to cover three months of imports, it shrinks to $150 billion, he said.
The falling ruble will cause the price of the imported goods to increase which will not go down well among the Russian population. I don't know how the volume will do. In any case it is plain how foolish the Russians will be to cut their own cash flow by stopping it's exports. In a relative short time, perhaps a couple of months or even less they could not longer cover the imports. And that will get the attention of a large share of of the Russians, especially those at the very top...
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