In the last Market Overview we wrote about falling commodity prices and problems of emerging markets resulting from the strong U.S. dollar. In this edition focus on the Russian economy, which suffers from both problems. The rise in the U.S. dollar and the plunge in commodity prices significantly hurt the Russian economy.

The key question is whether the 1998 Russian meltdown will repeat itself. Some analysts point out a few significant differences between 1998 and the current crisis in Russia, like larger foreign exchange reserves and lower public debt, and argue that today’s financial troubles will not be as severe as in the past. Why do they think so and why are they wrong?

In our interconnected global economy, Russia’s financial instability can affect other markets, but should investors expect the Russian trouble to positively affect the gold prices (and your portfolio)? You’ll find our detailed comments on the wounded eastern bear’s impact on the Western economies and gold market in the Feb 2015 Market Overview report.