Are Sanctions Pushing Russia Into Recession?

The American and Canadian stock markets and major indices continue to trade near record territory. Data out of both countries suggest that economic growth is gaining traction.

But the same can’t be said for the rest of the world. The Eurozone is on the brink of slipping into a recession after a closely watched economic indicator in Germany, the region’s biggest economy, fell more than expected—to its lowest level since 2012.

Germany slipping into a recession would have serious implications for the rest of the Eurozone—especially France, the second biggest economy in the region, and Italy (the third), both of which rely heavily on Germany for trade—that’s in worse financial shape than Germany.

Now there is word that Russia is on the brink of a recession. The U.S. and the Eurozone have imposed sanctions several times on Russia after it annexed Crimea in March and backed separatists in eastern Ukraine. The sanctions tightened restrictions on major Russian state banks, corporations, and the energy sector.

Many believed the easing of tensions in Ukraine would help put an end to international sanctions, but that didn’t happen. In fact, the relative calm in the region has done little to help Russia, as the lowest oil prices in more than two years threaten to send the world’s largest energy exporter into recession. That’s because Russia relies on oil and gas for around two-thirds of its exports and gets about half of its budget revenue from oil and natural gas taxes.

According to reports, Russia needs Urals, its primary export crude blend, to trade at $100.00 per barrel (or higher) to avoid a recession. Urals fell below $100.00 a barrel on September 21, 2014 for the first time in 15 months; and by the end of the week, had slid to around $93.00 per barrel—its lowest level in more than two years. (Source: Tartar, A., and Andrianova, A., “Russia Risks Recession as Oil Drop Seen Squeezing Budget,” Bloomberg Businessweek, September 26, 2014; www.businessweek.com/news/2014-09-25/russia-risks-recession-as-oil-drop-seen-squeezing-budget.)

The weakening Russian economy is also hammering the ruble, its currency. The Russian ruble currently trades at 39.10 against the U.S. dollar and 35.06 against the Canadian dollar. The Russian ruble has now fallen as much as 20% since the beginning of the year.

After being supported by oil and gas income, the Russian economy is staring a recession in the eyes. So far this year, an estimated $75.0 billion worth of capital has left Russia. This, after the Russian economy grew just 1.3% in all of 2013 and did not grow at all in the second quarter of 2014. (Source: “How far do EU-US sanctions on Russia go?” BBC News Europe, September 15, 2014; www.bbc.com/news/world-europe-28400218.)

Investors interested in trading more than stocks should consider taking the extensive Learn-To-Trade.com course. In addition to learning about stock trading, stock option trading, futures trading, risk management, and capital preservation, you will also learn about FOREX trading.

FOREX, or the foreign exchange market, is the market for trading currencies—and it is the largest financial market in the world. FOREX traders profit from the changes in values of currencies by speculating on which way the FOREX price will turn. Global currencies can fluctuate for many reasons: geopolitical tensions, economic news, and even weather.

The investing experts at Learn-To-Trade.com will teach you all about FOREX trading and how to analyze technical indicators that show you how to profit from the volatility of global economies, like Russia and the Eurozone.

For more information on the Learn-To-Trade.com course and Lifetime Membership, e-mail us at info@learn-to-trade.com, or call us at 416-510-5560.

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George Karpouzis is the co-founder of Learn-to-Trade and has been personally providing education and mentoring to over 3000 members since 1999. George has been trading in the stocks, options, futures and forex markets using technical analysis since 1986. With the help of advancements in trading technology the Learn To Trade program is now accessible worldwide. His background and passion for teaching brings an invaluable asset to our members. George is constantly striving to improve the program content and develop new strategic relationships for the benefit of the members. Add me to your G+

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Susan C

Don’t hesitate jump into it right now. You will be glad you did!

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The ongoing support has been the reason for my success

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I wanted to let you know that I had taken your course in the fall of 2013. I took your advice and used demo accounts for the last quarter of 2013. I switched to real money trading account in the Near Year, when I finally felt comfortable. Following the lessons taught to me by you (don’t jump on a moving train, peaks and valleys, EMA..etc), I wanted to let you know that I have been successful beyond my own expectations. Thank you very much – taking the Learn-to-Trade course was, by far, the best decision I made in my business career.

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Steven R

I wanted to let you know that I had taken your course in the fall of 2013. I took your advice and used demo accounts for the last quarter of 2013. I switched to real money trading account in the Near Year, when I finally felt comfortable. Following the lessons taught to me by you (don’t jump on a moving train, peaks and valleys, EMA..etc), I wanted to let you know that I have been successful beyond my own expectations. Thank you very much – taking the Learn-to-Trade course was, by far, the best decision I made in my business career.

Joseph L

The past options and forex tutorials taught by George were very helpful. I find these tutorials invaluable for a busy person like myself. I was able to keep myself up to date and on track ready to continue the learning process. Thanks for all the help and keep up the great work.

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Joseph L

The past options and forex tutorials taught by George were very helpful. I find these tutorials invaluable for a busy person like myself. I was able to keep myself up to date and on track ready to continue the learning process. Thanks for all the help and keep up the great work.

Harley S

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The course is amazing. Where were you 30 years ago?

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Learn to Trade provided me with strategy, self-confidence and discipline

Shelley P

I took your course in 2008 and loved it. Since then I have been using what I learned at Learn-to-Trade to nicely supplement my pension income. Wanting a carefree type of trading, I have for the most part just sold options and made a monthly income which is a nice addition to my pension. I know I never would have made this kind of trading income without Learn-to-Trade. Thank you!

Shelley P

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2014-08-20T10:34:39-04:00

Shelley P

I took your course in 2008 and loved it. Since then I have been using what I learned at Learn-to-Trade to nicely supplement my pension income. Wanting a carefree type of trading, I have for the most part just sold options and made a monthly income which is a nice addition to my pension. I know I never would have made this kind of trading income without Learn-to-Trade. Thank you!

Amir

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I just wanted to thank you again for the amazing work on the tutorials especially Options trading.   Prior to joining, I had underestimated the quality of the trainings but they certainly far exceeded my expectations. Only I wish I’d found you 5-10 years ago!
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Hi George, I just wanted to thank you again for the amazing work on the tutorials especially Options trading.   Prior to joining, I had underestimated the quality of the trainings but they certainly far exceeded my expectations. Only I wish I’d found you 5-10 years ago!
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