Russia Ruble (currency)

Ruble, nominal value:


Ruble, adjusted for inflation (M2 inflation):


I think this chart explains why Russian economy is doing so poorly. I believe that the unreasonable international sanctions imposed by western countries have not much to do with it. United states in the 1950’s and 1960’s were (because of 1930’s New deal program) pretty much enclosed economy but in spite of that were doing extremely well. But 33 fold increase of M2 money stock in only 16 years is too heavy load for economy to bear. Add widespread corruption and you have recipe for stagnation.

Half-life of Russian Ruble is only 3.2 years. Russian Ruble is loosing half of its value every 3 years! It looks like some pattern: the higher half-life of currency the better is the economy doing. Switzerland is the leader with half-life of Swiss Franc reaching nearly 15 years. Try to imagine how would any economy do on gold standard!

Russia is mystery and disappointment to me. So rich country but doing so poorly. They have everything: oil, natural gas, fertile land, water, coal, uranium, wood. I can imagine trans Russian highway ridden by motorbikes and trucks. Krasnoyarsk city comparable to Calgary. Vladivostok being city like Vancouver. Crowds of tourists heading for skiing in Caucasus and Altai, hiking and fishing in Siberia. Rich cities and suburbs, cheap land, cheap gasoline, booming industries, world looking up to Russia. So close and so far away as well…

To me the missing spark for Russian economy to boom is the old American mentality. Desire of people for justice, small government, free markets, gold standard, self responsibility, private ownership etc.

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