Russians Bracing for Hard Times

Seems like only months ago they were oh so cocky as they ridiculed the American economy. Turns out, it's the same ol' crappy Russia. But let me say, I don't think this is a good development for mankind. Russia is becoming increasingly desperate. And they are going to do something drastic soon.

There are many oft-quoted indicators of Russia's suffering economy — the nation's international reserves have fallen by more than 25 percent since August; the major stock indices recently plummeted by 70 percent; and the ruble has been sliding — it's now selling at exchange houses for about 30 to the dollar, compared with 23.5 five months ago.

Beyond those figures and the analysis of financial experts, however, on the streets of Moscow — a city that has known much tumult during the past century — there is for many Russians a deep sense of fear, a feeling of being underneath a gathering, dark wave of hard economic times.

Only last spring, downtown Moscow was a place where Russia's nouveau riche walked out the door of boutiques with fists full of bags from Hermes, Cartier and Gucci. In a city with more billionaires than any other in the world, Bentleys and BMWs idled outside the shops with drivers waiting to put the bags in the trunk and zip to the next shop.

That was before the war with Georgia in August, which kicked off an exodus of foreign capital; the global financial crunch, which dried up lines of credit used by heavily leveraged Russian businessmen; and, finally, the crash of oil prices that had underwritten much of the boom.

Crude-oil futures ended the year at $43 a barrel — a long way down from their record-shattering price of $147 in July.

"The stability based on oil wealth proved an illusion," observed a guest columnist in Tuesday's edition of Vedomosti, a business journal. The writer, the head of an influential polling center, reported that 61 percent of those interviewed in September said things were going in the right direction in Russia, a figure that dropped to 43 percent in December.