“Russia is an irreplaceable strategic partner on the international stage,” according to an editorial today in the Global Times, a Beijing-based daily affiliated with the Communist Party. “China must take a proactive attitude in helping Russia walk out of the current crisis.” China has by far the largest stash, almost $4 trillion in foreign-exchange reserves, 8 times larger than the US's.
China pledges to help Russia overcome economic hardships
What the hell is going on here? The oil crisis, if paying less to the gluttons is a crisis, is being caused by two factors.
1. Oversupply by the recent unforeseen fracking glut, not by the media's culprit - OPEC [who's not pumping an extra drop].
2.As famous oilman T. Boone Pickens said this morning, "Oil is down mainly due to weak demand."
T. Boone knows that all commodities are down because discretionary spending is way down in Europe and Japan, consequently there is less demand by manufactures for energy to produce the crap consumers their aren't buying. The US is slightly different in that the top crust are still spending, the credit card weilding ummer driving class is still going deeper in debt, but most Americans are cutting discretionary spending, even Xmas spending, both at the malls and online, is down over 10%.
The Ruble will regain it's strength more slowly than the V shaped bounce above in the coming weeks but the price of oil won't. There is a serious oversupply and the ones who'll be going down first are the oil field supply companies in 'ugly' oil sectors like in the tarsands and global fracking fiascoes, and other 'ugly' oil producers like in Iran, Venezuela and Mexico. Not sure about Iran but in Canada, Mexico and Venezuela almost everyone of those supply and equipment companies has huge loans that they were barely meeting before the plunge, now they're toast. All of those loans are bundled together into investment 'derivatives' that are then bought sold and bet on by insurance derivatives...the domino effect 21st century style.
Russia, China...all the BRICS nations can remain calm and confident that in the long-term slow and steady, not wild and speculative, wins the race.