While their standard of living was going up, the Russian people tolerated their oligarch, Vladimir Putin, Forbes Media chief Steve Forbes said Thursday on
Newsmax TV's "America’s Forum."
But with Russia’s overdependence on oil, Putin’s favorability ratings may soon tank, he said.
"[Russia] has suppressed other parts of its economy that could diversify that economy," Forbes said. "They don't have an atmosphere that allows that, so with the collapse in oil prices their economy is in very, very bad shape and no amount of bluster by Mr. Putin can get around it.
"Plutocrats always end up stealing too much, just like politicos in Washington always ending up spending too much."
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The key question looming on
Russia’s economic future, according to Forbes, centers on whether the Russian Central Bank knows how to defend the ruble.
"What they would do is go in the foreign exchange market, buy the ruble and keep the ruble out of — the rubles they buy out of circulation," he said. "What Russia's done so far is the rubles they bought they then pump back into the domestic economy.
"So bottom line, the money, the supply of ruble stays the same ... They've got ample resources to reduce the supply, but the real enemy for Putin here is not a lack of resources — it is ignorance."
Putin used the invasion of Crimea, which Russians have always considered a part of Russia, to distract his people from the dismal state of the economy, said Forbes, the author of
"Money: How the Destruction of the Dollar Threatens the Global Economy – and What We Can Do About It."
"He knew that he had to do the old traditional thing and that is, you divert people's attention from their troubles by going on adventures against your neighbors. And that's exactly what he did, but the economy is still in deep trouble," he said.
"He alone cannot raise the price of oil and with oil below, if it stays below $90-$100 a barrel, he's in trouble.
"They get most of their revenue from oil and gas, and we know the prices there have fallen sharply so he's in trouble no matter how many speeches he gives or how many times he rides on a horse without a shirt."
As for Cuba and President Barack Obama’s announcement Wednesday that he plans for the U.S. to
re-establish diplomatic relations with the communist island nation, Forbes said Obama "gave up everything and got in return nothing."
"He did not get the concessions that Cuban workers could keep the dollar, remittances they receive from their Cuban relatives in America. If you work from one of those resorts you still get paid a near worthless pesos. There's no lifting of political repression so Raul Castro must think he should get a Nobel Prize for negotiating.
"He took Obama to the cleaners and what's more ominous, though, is that this is a sign of what's going to happen when Iran finally decides to cut a deal with the U.S. They're going to, again, sweep the tables.
"Obama just wants an agreement for the sake of an agreement to show that he still matters and so I worry really about what's going to happen with Iran," Forbes said.
"Raul Castro just must be thinking he's the greatest genius ever. He's now going to get more money for his regime and gave up virtually nothing in return."
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