%% MAYBE right on US debt, assume they don't lie about it like so much , like they do so much?? Evil empire debt has a much greater risk, espececally since AUG 1998 , wasnt it?????????????????????????????????????????????????????????????????????????????????
https://files.stlouisfed.org/files/htdocs/publications/review/02/11/ChiodoOwyang.pdf From the St. Louis Fed--- "A Case Study of a Currency Crisis: The Russian Default of 1998 Abbigail J. Chiodo and Michael T. Owyang A currency crisis can be defined as a specula- tive attack on a country’s currency that can result in a forced devaluation and possible debt default. One example of a currency crisis occurred in Russia in 1998 and led to the devaluation of the ruble and the default on public and private debt.1Currency crises such as Russia’s are often thought to emerge from a variety of economic condi- tions, such as large deficits and low foreign reserves. They sometimes appear to be triggered by similar crises nearby, although the spillover from these con- tagious crises does not infect all neighboring econ- omies—only those vulnerable to a crisis themselves. In this paper, we examine the conditions under which an economy can become vulnerable to a currency crisis. We review three models of currency crises, paying particular attention to the events lead- ing up to a speculative attack, including expectations of possible fiscal and monetary responses to impend- ing crises. Specifically, we discuss the symptoms exhibited by Russia prior to the devaluation of the ruble. In addition, we review the measures that were undertaken to avoid the crisis and explain why those steps may have, in fact, hastened the devaluation. The following section reviews the three genera- tions of currency crisis models and summarizes the conditions under which a country becomes vulner- able to speculative attack. The third section examines the events preceding the Russian default of 1998 in the context of a currency crisis. The fourth section applies the aforementioned models to the Russian crisis. CURRENCY CRISES: WHAT DOES MACROECONOMIC THEORY SUGGEST? A currency crisis is defined as a speculative attack on country A’s currency, brought about by agents attempting to alter their portfolio by buying another currency with the currency of country A.2 This might occur because investors fear that the government will finance its high prospective deficit through seigniorage (printing money) or attempt to reduce its nonindexed debt (debt indexed to neither another currency nor inflation) through devaluation. A devaluation occurs when there is market pres- sure to increase the exchange rate (as measured by domestic currency over foreign currency) because the country either cannot or will not bear the cost of supporting its currency. In order to maintain a lower exchange rate peg, the central bank must buy up its currency with foreign reserves. If the central bank’s foreign reserves are depleted, the government must allow the exchange rate to float up—a devalu- ation of the currency. This causes domestic goods and services to become cheaper relative to foreign goods and services. The devaluation associated with a successful speculative attack can cause a decrease in output, possible inflation, and a disruption in both domestic and foreign financial markets.3 The standard macroeconomic framework applied by Fleming (1962) and Mundell (1963) to international issues is unable to explain currency crises. In this framework with perfect capital mobil- ity, a fixed exchange rate regime results in capital flight when the central bank lowers interest rates and results in capital inflows when the central bank raises interest rates. Consequently, the efforts of the monetary authority to change the interest rate are undone by the private sector. In a flexible exchange rate regime, the central bank does not intervene in the foreign exchange market and all balance of pay- ment surpluses or deficits must be financed by private capital outflows or inflows, respectively. The need to explain the symptoms and remedies of a currency crisis has spawned a number of models designed to incorporate fiscal deficits, expectations, and financial markets into models with purchasing power parity. These models can be grouped into three generations, each of which is intended to explain specific aspects that lead to a currency crisis. 1Kharas, Pinto, and Ulatov (2001) provide a history from a fundamentals- based perspective, focusing on taxes and public debt issues. We endeavor to incorporate a role for monetary policy. 2The speculative attack need not be successful to be dubbed a currency crisis. 3Burnside, Eichenbaum, and Rebelo (2001) show that the government has at its disposal a number of mechanisms to finance the fiscal costs of the devaluation. Which policy is chosen determines the inflationary effect of the currency crisis. Abbigail J. Chiodo is a senior research associate and Michael T. Owyang is an economist at the Federal Reserve Bank of St. Louis. The authors thank Steven Holland, Eric Blankmeyer, John Lewis, and Rebecca Beard for comments and suggestions and Victor Gabor at the World Bank for providing real GDP data. ©2002, The Federal Reserve Bank of St. Louis"
Everything is fake, scripted, across social media and life. I wouldn't be surprised if it was later revealed that story is fake...just to be catchy, funny and get free hype and marketing and publicity. Come on....charging 69 cents a gallon for gas?! You're telling me that is purely an accident and coincidental. Gas station owners and employees have the basic immature minds of 14 year olds.
Relax. It’s not that serious. You’re posting like a nutjob. Everything is fake and scripted? Everything?! Jesus.