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Russian President Vladimir Putin takes part in a news conference at the Novo-Ogaryovo state residence outside Moscow March 4, 2014. Putin said on Tuesday that Russia saw no need to use military force in the Crimea region of Ukraine for now, in remarks apparently intended to ease East-West tension over fears of war in the former Soviet republic.  REUTERS/Alexei Nikolskiy/RIA Novosti/Kremlin (RUSSIA - Tags: CIVIL UNREST MILITARY POLITICS) THIS IMAGE HAS BEEN SUPPLIED BY A THIRD PARTY. IT IS DISTRIBUTED, EXACTLY AS RECEIVED BY REUTERS, AS A SERVICE TO CLIENTS - RTR3G0UM
The ruble dropped my how much?
Here come some of the "costs" to Russia for violating the sovereignty of Ukraine, as of Monday morning:
1) The Russian benchmark stock index, the MICES, is down 10% or more (it has been down as much as 11.2% earlier today), the biggest drop in at least five years (depending on the close).

2) The Russian ruble reached all time lows against the euro and the dollar. To prop it up the Russian central bank—on a "temporary" basis—raised interest rates 1.5%, from 5.5 to 7.0%, and spent $10 billion toward the same end. This will significantly hamper growth in Russia unless they lower those rates fast.

3) Shares of the corporation Gazprom, the Russian Federation's gas monopoly, are also down 10%.

4) The yield the Russian government has to pay on its state bonds is near a record high.

5) Foreign capital reserves for Russia are at a multi-year low.

The Ukrainian currency and its markets, along with stocks in its neighbors Poland and Hungary, are down sharply as well, but of course the West can help out at a relatively small cost, given the size of their economies. No one is coming to the financial rescue of Russia here. For what it's worth, global financial experts (it is hard to write those words with a straight face) are confident that they do not see the "contagion" spreading to worldwide financial markets, which are down 1-2 percent so far today.

Please read below the fold for more on this story.

The Forbes contributor makes one other excellent point. Whereas the Soviet Union was essentially economically self-sufficient when it invaded Czechoslovakia in 1968, or Hungary in 1956, Putin's Russia is decidedly not, as the data above make clear. It is fully integrated into world trade markets as well, something that offers the West real leverage. Peter Weber has neatly laid out the steps the West can take, and why they can cripple the Russian economy.

Vladimir Putin may be "out of touch with reality," and "in another world," as German Chancellor Angela Merkel noted after speaking with him. In this world, however, money talks, and money may well prove to be what reins in the man who would recreate the Russian Empire.

PS-I just found this photo on Facebook:

Translation: "Supporters of Putin—with him you will not be speaking in Russian, but will be silent in Russian."

Originally posted to Ian Reifowitz on Mon Mar 03, 2014 at 06:41 AM PST.

Also republished by Daily Kos.

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