WHY Russians Are DUMPING Chinese Yuan to Save the Ruble

00:13:12
https://www.youtube.com/watch?v=DWasumElYvw

Resumo

TLDRMonetary economist Mark Bernard discusses the significant decline of the Russian Ruble and its implications on the broader Russian economy. He observes that the Ruble is in a stage four decline according to technical analyses, marked by high volatility. Russian efforts to stabilize the currency by selling Chinese currency, amounting to $54 million daily, are deemed unsustainable. Bernard argues that the decline indicates a broader economic weakness, as strong and stable currencies reflect robust economies. He compares the Ruble unfavorably to currencies like the US Dollar and Euro, noting that economies with weak currencies, like Zimbabwe and Venezuela, often endure underlying economic troubles. He believes that current sanctions exacerbate the Ruble's decline, as they limit financial interactions and confirm the Ruble and the Chinese currency's concurrent downturns. Bernard suggests that meaningful market transparency and democracy will ultimately enable freedom and stronger economies to prevail. Lastly, he cautions against investing in the Ruble, despite some speculating on a potential recovery.

Conclusões

  • 📉 The Russian Ruble is in a significant decline, marked by high volatility.
  • 📊 Money is systemic and affects all trade transactions, leading to broader market disequilibrium when unstable.
  • 💰 Strong and stable currencies indicate robust economies, while weak ones reflect economic issues.
  • 🌍 The US Dollar remains the most trusted and used currency, unlike the Russian Ruble.
  • 🔄 Current Russian government interventions to prop the Ruble are costly and unsustainable.
  • 🛢️ Sanctions on financial institutions are impacting the Ruble and aligning it with the declining Chinese currency.
  • 🚫 Investing in the Ruble is deemed risky due to potential revaluation or political changes.
  • 📈 Technical analysis using moving averages highlights the Ruble's ongoing stage four decline.
  • 🏛️ Economic transparency and democracy are seen as pivotal for future freedom and stability.
  • 🎭 The decline of the Ruble is likened to a dying economy amidst geopolitical tensions.

Linha do tempo

  • 00:00:00 - 00:05:00

    Mark Bernard, a monetary economist, discusses the Russian ruble's decline, emphasizing its broader economic implications. He draws a parallel between the systemic impact of money in every transaction and the current issues the Russian ruble faces due to monetary disequilibrium. Using a metaphor from a Disney show, he suggests that like the story's doomed kingdom, Russia's economic fate is sealed due to its faltering currency. The ruble's instability is highlighted by its technical decline and high volatility, exacerbated by Russia's daily selling of Chinese currency to prop up the ruble, a strategy he deems unsustainable. Bernard asserts that strong economies have stable currencies, contrasting Russia with countries like the U.S. and European nations.

  • 00:05:00 - 00:13:12

    Bernard critiques Russia's economic portrayal, arguing its actual GDP is far lower than claimed and insufficient to support its budget. He dismisses the viability of investing in the ruble, predicting a possible revaluation or collapse of the Russian state. He notes China's currency decline, linked to sanctions and decreased global confidence. Bernard highlights the U.S. dollar's dominance in FX markets, overshadowing weaker currencies like the ruble and yuan. He emphasizes that economic strength correlates with stable, trusted currencies, and sees Russia and China's current trajectories as detrimental. He argues for disregarding media narratives, urging reliance on technical analysis to validate market trends. Bernard concludes by advocating for market freedom and transparency, confident that these values will ultimately triumph over oppressive regimes.

Mapa mental

Vídeo de perguntas e respostas

  • Who is the speaker in the video?

    The speaker is Mark Bernard, a monetary economist.

  • What is the main topic discussed in the video?

    The main topic is the decline of the Russian Ruble and its implications on the Russian economy.

  • Where is the video being filmed?

    The video is filmed at a square called "V ukra," which means the Square of Free Ukraine.

  • What is the speaker's first claim about the economy?

    The speaker's first claim is that money is systemic and the second half of every trade transaction.

  • Why is the Russian Ruble said to be in decline?

    The Ruble is in decline due to monetary disequilibrium, high volatility, and artificial market interventions.

  • What comparison is made with other currencies?

    The Russian Ruble is compared unfavorably to more stable currencies like the US dollar, Euro, and Japanese Yen.

  • Why are sanctions affecting the Ruble according to the economist?

    Sanctions on financial institutions are hurting the Ruble by restricting trade and market participation.

  • What does the speaker think of the Chinese currency?

    The Chinese currency is seen as declining in parallel to the Russian Ruble.

  • What is the 'McDonald's Index' mentioned?

    The 'McDonald's Index' is a tool to compare the purchasing power of currencies through the price of a Big Mac.

  • What is the overall message from the economist?

    The message is that strong, stable currencies indicate strong economies, whereas weak currencies like the Ruble suggest economic problems.

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Rolagem automática:
  • 00:00:01
    hi my name is Mark Bernard I'm a
  • 00:00:02
    monetary Economist in this video I want
  • 00:00:04
    to talk about the Russian Rubble the US
  • 00:00:06
    dollar and you want the Chinese currency
  • 00:00:10
    I'm here in a square it actually
  • 00:00:15
    says V ukra the square of free Ukraine
  • 00:00:20
    and down there is the Russian Embassy
  • 00:00:21
    and across from that is some free
  • 00:00:25
    Russian flag and
  • 00:00:26
    monuments I was probably going to film
  • 00:00:29
    it there but the police presence is a
  • 00:00:30
    little bit too high and I asked the nice
  • 00:00:33
    lady and so I'm going to film it here
  • 00:00:36
    but it's perhaps it's even better
  • 00:00:38
    because here I am in the square of free
  • 00:00:39
    Ukraine and I'm going to talk about the
  • 00:00:41
    Russian Ruble and how it's going down
  • 00:00:43
    and the Russian economy and this is not
  • 00:00:46
    going good for Russia but I'm going to
  • 00:00:47
    back it up because I'm a monetary
  • 00:00:49
    Economist with specific evidence and
  • 00:00:52
    real data and things that you can nod
  • 00:00:55
    your head yes because the theory makes
  • 00:00:57
    sense so first thing I want to do is let
  • 00:01:00
    talk about before I talk about data and
  • 00:01:03
    E economics to your eyes glaze over I
  • 00:01:05
    want to talk about there's a show by
  • 00:01:07
    Disney believe it or not called once
  • 00:01:09
    upon a time a few years back I think
  • 00:01:10
    2000 about
  • 00:01:13
    2018 and one of the premises was the
  • 00:01:16
    kingdom the Magic Kingdom the beautiful
  • 00:01:18
    land was coming under a dark course and
  • 00:01:21
    the evil queen initiated this but when
  • 00:01:25
    all was lost and you could see this
  • 00:01:27
    Cloud this this Darkness approaching all
  • 00:01:30
    the people in Terror and
  • 00:01:32
    fear Snow White turn to the evil queen
  • 00:01:34
    and says you've lost I know it now at
  • 00:01:38
    the darkest moment
  • 00:01:40
    appearing the history was already sealed
  • 00:01:43
    and that's the same way it is with the
  • 00:01:44
    Russian Rubble so let me explain one of
  • 00:01:48
    my claims is as a monetary Economist
  • 00:01:51
    that money is the second half of every
  • 00:01:54
    transaction it has a systemic effect
  • 00:01:56
    across all markets so if the market for
  • 00:02:00
    tulips is in disequilibrium it affects
  • 00:02:03
    the tulip market if the market for
  • 00:02:05
    potatoes is in disequilibrium it affects
  • 00:02:08
    the potato Market but there are nice
  • 00:02:09
    complement and substitutes if the market
  • 00:02:12
    for cars let's say a specific brand is
  • 00:02:15
    in dise equilibrium it affects that car
  • 00:02:17
    market and even with oil okay we can say
  • 00:02:23
    there are substitutes and mitigations
  • 00:02:25
    but if the market for money is in
  • 00:02:27
    disequilibrium it has a systemic effect
  • 00:02:29
    that across all markets become in
  • 00:02:31
    disequilibrium is based on supply and
  • 00:02:33
    demand because you trade something I
  • 00:02:35
    bought this jacket for money I buy this
  • 00:02:38
    camera for money you might buy a flat an
  • 00:02:41
    apartment for money it's the second half
  • 00:02:44
    that you barter it out for instead of
  • 00:02:46
    using barter because of the double
  • 00:02:49
    coincidence of once we use money as a
  • 00:02:51
    store value medium exchange unit of
  • 00:02:53
    account I've gone over this and that is
  • 00:02:56
    the Cornerstone of Austrian Theory
  • 00:02:59
    business cycle as well as Stockholm
  • 00:03:02
    Theory and now they break it down of
  • 00:03:04
    course into interest rates the natural
  • 00:03:06
    rate of interest versus the bank rate of
  • 00:03:07
    interest because uh you know money and
  • 00:03:10
    currency let's say M1 is not as used as
  • 00:03:15
    it was thousands of years ago hundred
  • 00:03:17
    years ago this market rate versus
  • 00:03:20
    natural rate is the
  • 00:03:22
    intermediary measure of disequilibrium
  • 00:03:25
    in an
  • 00:03:26
    economy so right now you can see
  • 00:03:29
    symptoms of a monetary disequilibrium in
  • 00:03:32
    the rubble 100% because of one a stage
  • 00:03:35
    four decline in Technical analyses and
  • 00:03:38
    two high volatility very high volatility
  • 00:03:42
    now right now you may say well it's
  • 00:03:44
    bounced back up towards resistance
  • 00:03:46
    095 they broke the other resistance or
  • 00:03:49
    the support of
  • 00:03:51
    09 all the way to
  • 00:03:53
    088 and the Russians said well we're not
  • 00:03:55
    going to intervene but they are
  • 00:03:57
    intervening they are what they're doing
  • 00:04:00
    is selling Chinese currency every single
  • 00:04:03
    day I think it's like $54 million a day
  • 00:04:05
    it comes out to be like 2 you know three
  • 00:04:08
    billion 2.4 billion a month that's a lot
  • 00:04:11
    of money that they can't afford just to
  • 00:04:14
    prop up their currency why are they
  • 00:04:15
    doing this I believe they're doing this
  • 00:04:19
    because the the case of death for every
  • 00:04:21
    currency or country economics is a bad
  • 00:04:24
    currency my second claim my first claim
  • 00:04:27
    is money is systemic it's the second
  • 00:04:29
    half of every trade transaction and
  • 00:04:30
    disequilibrium in the money market
  • 00:04:31
    creates disequilibrium across all
  • 00:04:33
    markets my second claim is
  • 00:04:36
    this economies that have strong stable
  • 00:04:39
    solid low volatility I want it I want
  • 00:04:43
    that currency I trust that currency are
  • 00:04:45
    are usually founded on strong economies
  • 00:04:48
    no matter what is said in the
  • 00:04:51
    news current countries that have weak
  • 00:04:53
    currencies whether it be Zimbabwe the
  • 00:04:55
    poster chart Venezuela where they eat
  • 00:04:57
    rodents or Argentina
  • 00:05:00
    usually there's something wrong with
  • 00:05:01
    that economy right if you can refute me
  • 00:05:05
    on those two claims I challenge you
  • 00:05:07
    basic economics basic challenge so the
  • 00:05:10
    rubble they don't want to seem as weak
  • 00:05:13
    as they are in my last video I said
  • 00:05:15
    their GDP is about a is about an eighth
  • 00:05:18
    or a fraction of what they actually
  • 00:05:20
    claim on the macroeconomic
  • 00:05:22
    level you know I think I think it's like
  • 00:05:24
    450 billion and that can't support a
  • 00:05:27
    budget or any kind of major support what
  • 00:05:30
    they're trying to do is saying and it's
  • 00:05:32
    totally sarcasm Russia big Russia strong
  • 00:05:35
    support the ruble until the curtain the
  • 00:05:37
    next Administration comes in in
  • 00:05:39
    Washington and maybe there's some hope
  • 00:05:41
    that they'll be seen as strong but of
  • 00:05:43
    course we know that's not
  • 00:05:46
    true so the ruble they're trying to
  • 00:05:49
    support it and they're they're blowing
  • 00:05:51
    they're you know Bank wad all their cash
  • 00:05:54
    trying to keep it up maybe up to the new
  • 00:05:57
    res resistance of a 0 95 we'll watch it
  • 00:06:00
    over but remember what I said in order
  • 00:06:03
    for a stage four to transmute into a
  • 00:06:06
    stage two which the price of the asset
  • 00:06:09
    is above the 200 day moving average
  • 00:06:11
    there has to be a long Plateau longer
  • 00:06:14
    than actually the stage FL which is been
  • 00:06:15
    going on arguably for 15 years some guy
  • 00:06:18
    on my you know blog is's writing me and
  • 00:06:20
    he's like well should I invest in the
  • 00:06:22
    ruble he's like I think Russia will
  • 00:06:24
    recover someday and the rubble would be
  • 00:06:25
    worth something how do I invest in that
  • 00:06:28
    what
  • 00:06:30
    I'm sorry what are you talking
  • 00:06:33
    about I mean there's more chance that
  • 00:06:36
    they'll revalue their currency or the
  • 00:06:37
    the country will go away this 500y year
  • 00:06:40
    anomaly this nightmare called Moscow
  • 00:06:43
    moscoa Russia will probably might just
  • 00:06:45
    go away and maybe that Embassy down the
  • 00:06:48
    you know will become like a uh you know
  • 00:06:50
    orphanage or something down
  • 00:06:53
    there let's
  • 00:06:56
    hope the Russian State as it exists is
  • 00:06:58
    an anomaly the monetary decline is a
  • 00:07:02
    symptom of a aen economy dying they're
  • 00:07:06
    buying Chinese currency but the Chinese
  • 00:07:09
    what's happening with the Chinese
  • 00:07:10
    currency over the last month since
  • 00:07:11
    they've been buying it the Chinese
  • 00:07:13
    currency has been mirroring the decline
  • 00:07:15
    of the ruble I am a monetary Economist I
  • 00:07:18
    watch these things daily I am on the
  • 00:07:19
    tape the the ruble is going down stage
  • 00:07:22
    four the Chinese currency is going down
  • 00:07:24
    stage four it's because the sanctions
  • 00:07:26
    and the sanctions on financial
  • 00:07:28
    institutions they are being being
  • 00:07:29
    checked and double checked because
  • 00:07:31
    nobody wants to be in the bad Graces of
  • 00:07:33
    the huge markets of Europe and America
  • 00:07:36
    even though it's not the larger
  • 00:07:37
    percentage ultimately you can't just
  • 00:07:40
    trade oil for something and not be
  • 00:07:43
    participating in this world
  • 00:07:46
    economy so you might say well you know
  • 00:07:49
    the United Arab Emirates Chinese
  • 00:07:51
    currency CR currencies like that are
  • 00:07:53
    important or significant they Rivals no
  • 00:07:56
    they're not what are the top five
  • 00:07:58
    currencies in the world
  • 00:08:00
    anybody know number one currency that
  • 00:08:03
    everybody trusts everybody uses no
  • 00:08:05
    matter what you say is the US dollar 88%
  • 00:08:08
    of FX transactions of the USS US dollar
  • 00:08:11
    and you can take that to the
  • 00:08:12
    bank the euro is
  • 00:08:14
    32% the Japanese currency the one is 70
  • 00:08:18
    177% Great British pound is 13% the
  • 00:08:21
    Australian dollar is
  • 00:08:23
    6.8% those are the places I want to live
  • 00:08:26
    and you may say well that's not even
  • 00:08:28
    adding up to that's almost 100% correct
  • 00:08:31
    because remember FX has two sides of the
  • 00:08:33
    transaction but my point is the Chinese
  • 00:08:37
    currency is not there the Russian Ral is
  • 00:08:39
    certainly not there and no other
  • 00:08:41
    currency I want to live in Europe great
  • 00:08:43
    places in Europe beautiful Poland
  • 00:08:46
    Scandinavia Britain America I want to
  • 00:08:49
    live in these great countries
  • 00:08:51
    Australia I mean even even pewo in Japan
  • 00:08:55
    or something now these are just places
  • 00:08:57
    with high life expectancy High culture
  • 00:08:59
    high in you know peaceful place
  • 00:09:02
    wonderful beautiful places that you can
  • 00:09:04
    raise the Next
  • 00:09:05
    Generation and that's what it's about
  • 00:09:07
    making this world a better
  • 00:09:10
    place Chinese currency is non-existent
  • 00:09:13
    not even on the not even and you know
  • 00:09:16
    again Russia like China can claim big
  • 00:09:19
    strong country to the world but I don't
  • 00:09:22
    want to live there you know like I think
  • 00:09:23
    that Chinese like let's say China has
  • 00:09:26
    you know plateaued out at like $155,000
  • 00:09:29
    a year year us you could say well US
  • 00:09:31
    economy is Plateau to the household
  • 00:09:33
    incomes yeah like $80,000 a year okay or
  • 00:09:36
    whatever the chines number is I'm not
  • 00:09:38
    I'm not big on aggregate numbers right
  • 00:09:41
    now oh let's use the McDonald's index
  • 00:09:45
    okay let's say the currency Market is
  • 00:09:46
    all like rigged and you know the Bitcoin
  • 00:09:49
    and we can never tell which way is which
  • 00:09:51
    but there's something called the
  • 00:09:51
    McDonald's index you it's a pretty good
  • 00:09:54
    index I think The Economist magazine
  • 00:09:56
    used to put it out it was pretty good in
  • 00:09:57
    its day and you compare
  • 00:09:59
    prices of like the McDonald's Big Mac in
  • 00:10:01
    one country next to the purchasing power
  • 00:10:04
    oh oh I'm sorry R Russia confiscated uh
  • 00:10:08
    the assets of McDonald's when I you know
  • 00:10:10
    stole it and they have something called
  • 00:10:12
    tasty and better which I hear is just
  • 00:10:15
    like basically I wouldn't give it to my
  • 00:10:17
    dog so we can't even use the McDonald's
  • 00:10:20
    index okay they don't even have
  • 00:10:23
    McDonald's okay so that shows you that
  • 00:10:26
    there's something major wrong with the
  • 00:10:28
    Russian economy
  • 00:10:30
    but back to the seriousness of this
  • 00:10:33
    technical analysis using the 50-day and
  • 00:10:36
    even simple moving average 200 day I'm
  • 00:10:38
    not getting into Vector Auto regression
  • 00:10:39
    models which I love to get into please
  • 00:10:41
    let me get into this and developing
  • 00:10:44
    these huge models the simple moving
  • 00:10:46
    average the tape it tells everything you
  • 00:10:48
    need to know and this rule is in a stage
  • 00:10:50
    four they can prop it temporarily at
  • 00:10:54
    billions and billions of dollars a month
  • 00:10:56
    just to keep it within a resistance band
  • 00:10:59
    and that's probably until the next
  • 00:11:01
    Administration takes over in in DC you
  • 00:11:04
    know Victor Orbin is interfacing with
  • 00:11:06
    that Administration I mean what does
  • 00:11:09
    Victor Orbin have to do with the United
  • 00:11:10
    States he's like a poodle or something
  • 00:11:13
    right of of a of a of a despot you know
  • 00:11:17
    maybe there's I don't know
  • 00:11:18
    cryptocurrency I I don't know so these
  • 00:11:21
    sanctions are getting Tighter and
  • 00:11:23
    Tighter they're very serious if there's
  • 00:11:26
    anything going around I've seen any
  • 00:11:28
    these terms sanctions release relief for
  • 00:11:30
    peace again that's probably all AI
  • 00:11:33
    generated Bubbles and and keywords
  • 00:11:36
    that's just infiltrating social media
  • 00:11:39
    etc
  • 00:11:40
    etc ignore the news ignore that social
  • 00:11:43
    media uh Buzz information is the lowest
  • 00:11:46
    form of knowledge look at the tape and
  • 00:11:48
    the trend Stan Weinstein read his book
  • 00:11:52
    how to make money in a bull or bear Mar
  • 00:11:54
    Market I'm not recommending it
  • 00:11:55
    specifically no affiliation but it is
  • 00:11:58
    and look I'm an academic Economist top
  • 00:12:01
    universities doing top academic
  • 00:12:04
    research I still think it's of value
  • 00:12:07
    moving averages don't go away the future
  • 00:12:10
    is embedded into the price and the price
  • 00:12:13
    of the ruble is going down they're
  • 00:12:14
    trying to prop it up at the cost of
  • 00:12:16
    billions they're not going to be able to
  • 00:12:18
    do that the Chinese economy is going
  • 00:12:20
    down simultaneously paralleling they're
  • 00:12:23
    like the rulin and the Klingons publicly
  • 00:12:25
    the Klingons being you know the bad
  • 00:12:27
    version of the Klingons being Russia and
  • 00:12:29
    the ramul is maybe a little bit they're
  • 00:12:32
    there're just both going down they're
  • 00:12:33
    out of control like two inebriated
  • 00:12:36
    people on a ski slope or something so if
  • 00:12:38
    they're if they're trying to save the
  • 00:12:40
    ruble by buying or selling Chinese
  • 00:12:43
    currency good luck to
  • 00:12:45
    that what Ukraine has to do is hold
  • 00:12:48
    strong and just believe in the idea of
  • 00:12:51
    freedom freedom of Market transparency
  • 00:12:55
    democracy and with time that will
  • 00:12:58
    prevail because good always wins over
  • 00:13:03
    evil my name is Mark beran I'm a
  • 00:13:06
    monetary Economist have a great day
  • 00:13:08
    thank you very much
Etiquetas
  • Russian Ruble
  • economy
  • currency decline
  • sanctions
  • monetary economics
  • Chinese currency
  • US dollar
  • financial markets
  • economic stability
  • market analysis