The Russian economy is in free fall as the ruble has lost half it's value during the dizzying slide in oil prices. Last Tuesday, the ruble tumbled 10% - a follow up to Monday's 10% slide.This precipitated panic buying in the stores as Russian consumers, fearing their rubles will only become less valuable in the near term, crowded retail stores to buy up everything in sight.

Politico:

Although this past week’s currency crisis marked the worst fall for the ruble since Russia defaulted on its debt in 1998, no one was waiting in bread lines or starting a run on the bank. Instead, anyone with any cash at all went on a buying spree. Long lines snaked through Ikea branches around Moscow into the early hours of Wednesday morning as people picked up furniture, bedding and other household goods at what had suddenly become bargain-basement prices. Crowds of eager buyers emptied shelves of computer monitors and snapped up flat-screen televisions at consumer electronics chains.

People were purchasing refrigerators, washing machines, cameras—anything that was less likely to lose its value as fast as the plummeting ruble. Cars in some dealerships were being sold at 30 percent to 50 percent above the recommended retail price, yet “people run and bring their last money,” one social network user wrote.

 

“Yesterday the line for the cash register was to the other end of the hall,” Ravil Daizrakhmanov, an employee of the consumer electronics store M.video, said Wednesday. “They were buying very expensive tech products.”

The ruble has lost over half its value this year as falling oil prices and Western sanctions over the Ukraine crisis hit Russia’s energy-dependent economy. But a drop of 10 percent on Monday and another 10 percent on what has come to be known as “Black Tuesday” further shook consumers, undermined investor confidence and revealed divisions among the country’s elite on how to react. Nonetheless, Russians’ approval for President Vladimir Putin has remained sky-high.

Buying continued on Wednesday as major electronics chains had yet to raise their prices. “I apologize; I argued with them, but they sold every last one,” an M.video employee informed a man who was trying to purchase a washing machine. “F—k your apologies,” the man yelled back as he stormed off to complain to a manager.

Others were just out for a good deal. Even after the ruble came down to 67 to the dollar, an iPhone 5S at electronics retailers now cost $100 less than in the United States. Apple.ru even halted online sales on Tuesday “due to extreme fluctuations in the value of the ruble.”

Inflation is getting worse. Prices went up 8.3% in October to 9.1% in November. Food prices are spiking and Russians are crowding grocery stores, buying thousands of dollars in food, hedging their bets against prices going even higher.

With all of this catastrophic news, you would think Putin's approval ratings would be in the tank. In fact, 81% of the country supports him. The people blame the west and the sanctions imposed for Russia's takeover of Crimea for the rotten economy.

Why shouldn't they? Despite the fact that currency speculators and the dive in oil prices are far more responsible for Russia's economic predicament, when the president of the United States brags that sanctions have brought Putin to his knees - and Putin himself deflects blame for his mismanagement by citing sanctions - the Russian people are only to glad to ignore reality and accept the myth.

Some analysts are saying oil could fall to $40 bbl. That would be a cataclysm that could bring the Russian economy to its knees. In this worse case scenario, Putin wouldn't be the first leader to look abroad for an adventure to distract the people from their misery. Wars have begun over less, so the Russian meltdown bears watching.