31 March 2012

Moscow Edges Out New York

Here is a December 2011 survey from The Economist ranking the world's most expensive cities.  Moscow still edges out New York, but a "bargain" compared to Zurich, Tokyo, and Oslo.  I am grateful, because it could be worse.

30 March 2012

Be Grateful: It Could be Worse

Long ago, in the flat West Texas desert near the New Mexican border,  I was stuck in a rather frustrating in situation with a friend.  In a moment of calmness, he said:  "Always remember this when things are bad:  It could be worse."

The words of my friend, Nik, had a certain weight to them.  He was born in Yugoslavia in an ethnically mixed house.  He and his family relocated to Liberia - once a peaceful country - when Nik was young.  He then came to the US where he and I became classmates.  Nik's amazing power was being able to stay optimistic despite the anything that was happening in the current situation.  I suppose that this is a necessary skill when your parents, one a Serb and the other a Croat, find themselves in opposing sides of a civil war that ends up destroying the country you were born into. And, as it turns out, another civil war destroys the beautiful country of your youth.

Now, let's talk about the weather.  Last year, on this day, I complained about Russia's long winter.  Soon after my complaint, the sun came out, green shoots popped out, and spring came roaring in.  This year, the spring is delayed by just a bit more (by Moscow standards).  The weather forecast tells the story (left forecast is in Fahrenheit, right in Celsius).

Yup, snow is in the forecast for another week.  As Nik said, "it could be worse."  Let's be grateful that it is not.

25 March 2012

Inflation Expectation?

Since my residency began in Moscow over two years ago, the US dollar - Russian ruble exchange rate has been relatively stable and within a 15% range.  This would be a wide and volatile range if currencies of developed economies were to be compared, but Russia is a developing economy, making this a tolerable range.

In the same time period, I have noticed a remarkably different attitude towards change.  Upon my arrival, the following coins were readily traded at most grocery stores:
  • 10 kopeks (10% of ruble)
  • 50 kopeks
  • 1,2, and 5 ruble coins

Worth Something Sometime Ago

At the same time 10 ruble coins were just coming into existence while 10 ruble bills were just being phased out by the Russian central bank.  Attitudes towards Russian change are different now.  At least in downtown, kopek coins are almost never traded; 1 and 2 ruble coins seem to have taken their place as the minimally acceptable change.  Moreover, when I try to unload a pocket full of change, for example for a bottle of water or a metro ticket, my payment method is universally rejected.  Vendors, including those who act on behalf of the government, want to see as few coins as possible. 

In the same context, I noticed some retaliatory behavior by vendors.  I made a purchase today for 375 ruble.  I paid with a 500 ruble bill and included two 10 rouble coins and five 1 ruble coins, expecting a return of 150 rubles with one 100 ruble bill and one 50 ruble bill.  After having received the 100 ruble bill, I then received 50 roubles in combinations of 1 and 2 rouble coins.  It was as if I were being punished for having put forth the small change.

Comrade, I Ruined This Economy Long Ago

This stands in stark contract with my experience in Western Europe over the previous two weeks, where I spent three different currencies in four different countries.  The Brits and Swiss respect their coins and accept them without any question.  The Germans and French, despite having been through a euro-style roller coaster as of late, still honor their small change with dignity.  

It should also be pointed out that Western Europe has a rather modest inflation, compared to Russia's 8% inflation in 2011.  Perhaps, the attitude on Moscow's streets is reflective of expected inflation going forward, and the desire of getting rid of the small change indicative that the populace is gearing up for using larger denominations for smaller purchases.