I think there is a much-hyped CNBC special on Russia tonight. http://www.bloomberg.com/apps/news?pid=20601109&sid=a9j1692M5GA8&refer=news Dec. 11 (Bloomberg) -- Moscow resident Tima Kulikov banked on the full faith and credit of the U.S. government, not the Kremlin, when he sold his biggest asset for cash. The 31-year-old director of a social networking Web site initially agreed to sell his apartment for rubles, then cringed at the thought of the currency weakening as it sat in a lockbox pending settlement of the contract. It wasnât until the buyer showed up with $250,000 stacked in old mobile-phone boxes and stuffed in his pockets that Kulikov closed the deal. âThe exchange rate we agreed on wasnât great, but I did it because the moneyâs going to lie there for a month,â Kulikov said. âPut it this way, the rubleâs more likely to have problems than the dollar.â Russians are shifting their cash into foreign currencies and buying things they donât need as the economy stalls and the central bank weakens its defense of the ruble, signaling a larger devaluation may be on the way. The currency has fallen 16 percent against the dollar since August, when Russiaâs invasion of neighboring Georgia helped spur investors to pull almost $200 billion out of the country, according to BNP Paribas SA. The central bank today expanded the rubleâs trading band against a basket of dollars and euros, allowing it to drop 0.8 percent, said a spokesman who declined to be identified on bank policy. With the specter of the 1998 debt default and devaluation in mind, Russians withdrew 355 billion rubles ($13 billion), or 6 percent of all savings, from their accounts in October, the most since the central bank started posting the data two years ago. Foreign-currency deposits rose 11 percent. Oligarchs Pinched Those withdrawals are increasing pressure for the rubleâs devaluation, according to Basil Issa, an emerging- markets analyst at BNP Paribas in London. Property is now a protective investment, not just a status symbol, said Sergei Polonsky, founder of real estate developer Mirax Group, which is building Moscowâs tallest skyscraper. âLately our clients are mostly those who buy real estate not to live in but to secure their investments,â Polonsky said. âNo one wants to be left with pieces of paper.â The 25 wealthiest Russians on Forbes magazineâs list of billionaires, including Oleg Deripaska and Roman Abramovich, lost a combined $230 billion from May to October as asset values plummeted, according to Bloomberg calculations. âFeel Happyâ For the burgeoning middle class, investments of choice range from electronics to gold jewelry. Evroset, Russiaâs largest mobile-phone chain, is telling people to buy anything they can. âItâs better to feel happy that you own something than to fear losing the money you have earned,â Chairman Yevgeny Chichvarkin says in a letter posted at 5,200 Evroset stores. âIf you need a car, buy a car! If you need an apartment, buy an apartment! If you need a fur coat, buy a fur coat!â Sales at Technosila, the third-biggest consumer electronics chain, have doubled since September as customers rush to swap rubles for flat-screen TVs and laptops, spokeswoman Nadezhda Senyuk said by phone from Moscow, where the company is based. Jewelry sales are also accelerating, particularly items made of gold and diamonds, said Vladimir Stankevich, advertising director at Adamas, Russiaâs third-largest jewelry retailer. âMore cash appeared on the market and thereâs an opinion among shoppers that gold is a good investment in times of crisis,â Stankevich said. Natalya Kulikova has a different approach. The 31-year-old sales manager said sheâs opened accounts in rubles, euros and dollars at three different banks -- one foreign and two domestic -- to guard her savings. âMy main goal is to save money,â she said. Putin Pledge Those who donât want to spend are keeping more money at home or in safe-deposit boxes because the government guarantee on bank accounts is limited to 700,000 rubles, said Yulia Tsepliaeva, chief economist in Moscow at Merrill Lynch & Co. Alfa Bank, Russiaâs biggest non-state lender, said demand for boxes has increased about 40 percent since October, and there are few available. âThe Russian experience with saving is not that good and people prefer to consume and enjoy rather than save in pre-crisis situations,â Tsepliaeva said. âBuy cash dollars and put them in mattresses or safe deposit boxes but not in accounts because most crises are accompanied by banking crises.â A decade ago, many lost their life savings after the ruble plunged 71 percent against the dollar. Those fears prompted Prime Minister Vladimir Putin to pledge not to allow âsharp jumpsâ in the exchange rate, during a call-in television show Dec. 4. âIdeal Timeâ Troika Dialog, Russiaâs oldest investment bank, is betting the central bank will allow a one-time devaluation of the ruble of about 20 percent in January, following New Yearâs and Orthodox Christmas celebrations. âWith the holidays at the beginning of January, companies wonât be fully working and people will be spending more money,â said Evgeny Gavrilenkov, Troikaâs chief economist and a former acting head of the governmentâs Bureau of Economic Analysis. âThat means demand for rubles will increase and that means itâs an ideal time to allow a devaluation.â Russia has drained almost a quarter of its foreign-currency reserves, the worldâs third-largest, since August as it tries to slow the rubleâs decline. The central bank has widened the trading band five times in the past month, effectively reducing its defense of the currency amid plunging oil prices. Devaluation Skeptic Urals crude, Russiaâs main export earner, has slumped 72 percent since reaching a record $142.94 a barrel July 4. It fell below $40 for the first time in three years last week, compared with the $70 needed to balance the countryâs budget. The government will avoid a large, one-step devaluation because it wants to prevent a run on the banks and lure back foreign investors, said Chris Weafer, chief strategist in Moscow at UralSib Financial Corp. âIâm skeptical a 10 to 15 percent devaluation will provide a significant boost for the economy because the sector that it will most benefit, manufacturing, is just too small,â he said. The ruble will probably be allowed to drop in small steps to as low as 33 per dollar by the middle of 2009, from about 28 now, Weafer estimates. It will end next year at 26.8 because of a recovery in oil prices and a weaker U.S. currency, he said. Svetlana Guseva isnât taking any chances. The 32-year-old mother of two from the southern city of Sochi plans to take her 8-year-old daughter, Dasha, to Moscow for the New Yearâs holiday, a trip that will cost twice her familyâs monthly income of about 30,000 rubles. âThis way at least weâll have some memories,â she said.