Yeltsin democratized Russia against the will of the Soviet Government. Yeltsin was the president of the Russian Federation. Yeltsin transformed Russian into a free market economy allow price liberalization, liberalizing trade, and increased privatization of state owned enterprises. National Wealth fell into the hands of few. Russia criminal system benefit from the privatization and most of the population was poor and did not benefit causing Yeltsins popularity to drop to 2%. Yeltsin wanted to give the Russian people freedom. The Russian economy would not be fix in five to ten years. The transformation would take time and corruption had to be reduced for the free market economy to work. In 1991, the Soviet Union was collapsing and injections of free market economics would not have saved the economy. IMF price shock therapy did not work. Russia received $40 billion in funds. In 1990s, Russian GDP fell 50 percent and unemployment increased. Blame the banks. The Central bank of Russia fueled hyper inflation due to loose conservative monetary policy.

What caused the high level of inflation in Yeltsin era? Yeltsin raised interest rates to curb inflation , to tighten money and restrict credit. The crisis in Russia would destabilize the ruble and shock the bond market. Why didn't Enron see the writing on the wall and escape from their derivatives leveraging?

After the 1993, Russian White House shelling, Yeltsin introduced a new constitution. Yeltsin could not escape the economic hyperinflation caused by the Russian central bank.

Putin is restoring the old regime and removing the liberal democratic elements setup by Yeltsin. Russian is the richest country in the world for resources. The oil and gas money has been used to pay off debt, Europe depends more on Russian than the Middle East for energy. Putin is using the new money to build his great power nationalism and ambitions. Russian lost its status as a super power after the economic crash of the Cold War despite the fact Russia has 16000 missile. However, many of the missiles are very old and dangerous. Since 1990, Russia's economy has grown at 7 percent. Russia had the third largest reserve currency. Russian believes it is in the driver seat of Europe and uses energy as a lever to get it demands . Russian is buying up European assets. Russia is modernizing its nuclear arsenal. Russia military strength is a fraction of the us strength. America is very strong due to carriers, destroyers,submarine, and air power. Russia pays for a million man army for ground assault capability.. Russia maintains troops in Chechnya, Georgia, and Moldova. Russian manipulates the UN Security Council to affect oil politics in Europe and Central Asia. Russian is uncomfortable with NATO enlargement and us intervention in Europe calling the Cold War, a castrophe shocking liberal Europe. Russia want to regain much of the global power and respect it lost. Russia wants equal say with the us and china on global affairs. Russia is proud how the Russian federation crushed Chechnya revolt. Russia remorse the history of Kosovo and wishes to repair lost glory. Russia is bent on prevent Ukraine and Georgia from joining NATO. Russia is extending power into Poland and Czech Republic. Russia wants Poland and is oil rich shale deposits under strategic grasp. Europeans have bet that soft power would appease Russia, they miscalculated. Europe depends on the American security guarantee for protectin. What would Europe and the United States do if Russia played hardball in Ukraine or Georgia?

The Russian central bank is buying gold. The bank holds the third largest reserves in the world. Russian growth is linked to china growth and oil demand. Russian has been exchanging rubles for yuan. Trying to peg the ruble to the more stable yuan. The ruble is devalued significantly against the dollar experiencing 7 to 8 percent inflation. When central banks buy gold they are show support for the commodity as a constant factor, a know price, and an international measure

The Russian reserve, the third largest in the world, is invested 40 percent in the euro and 27 percent in the dollar. The Russian central bank is not selling euros or dollars in a rapid rate. China has initiated currency swap with Russia to help stablize the ruble and prevent panic sell of the euro. China probably has about a trillion dollars worth of euros. If the Russian central bank panicked and began sell off of the ruble then china may be able to buy some of the sell off. The Russian central bank has indicated it won't sell it portion of euros. However, the Russian central bank has 7 percent bad loan defaults and 7 to 8 percent inflation. Interest rates in Russian must rise to offset hyperinflation and food price surges. The Russian central bank continues to buy gold indicate failing confidence in currencies and world economic growth. Russia's economic growth depends on oil sales to Europe and china. If these economies show signs of weakening more distress will be place on the Russian central bank. A fed bailout will be voiced, but unlikely due to the severe political backlash over the failed previous two bailouts that benefit big banks