The Link between the Ruble and Keynes

On March 3, 2014, the United States went to war with Russia. That’s when the U.S. first imposed sanctions. And, yes, sanctions are nothing more than war by non-military means. Then, on November 11 Russia committed a major misstep. It floated the ruble. Since then, the ruble hasn’t floated on a sea of tranquility. It has plunged in lockstep with oil — by about 25% and its volatility has soared to around 65%.
The ruble’s plunge means that Russian imports will be more expensive and exports more competitive. This combination will help keep Russia’s current account positive, which will offset some of Russia’s massive capital flight.