Vladimir Putin has lost control of Russia's economy and may be forced to impose Soviet-style exchange controls after "shock and awe" action by the central bank failed to stem the collapse of the ruble. "The situation is critical," said the central bank's vice-chairman, Sergei Shvetsov. "What is happening is a nightmare that we could not even have imagined a year ago." The currency spiked from 71 to 98 against the euro yesterday (12/16) in the biggest one-day drop since the default crisis in 1998 as capital flight gathered pace, despite a drastic rise in interest rates to 17% the day before (12/15) intended to crush speculators and show resolve. It closed at 87, and at this writing today (12/17) is at 83. Yields on two-year Russian bonds spiraled to 15.36%, while credit default swaps are pricing in a one-third chance of a sovereign default. The shares of Russia's biggest lender, Sberbank, fell 18%. Neil Shearing, from Capital Economics, said the spectacular failure of the rate shock may bring matters to a head. "If a rise of 650 basis points won't do the job, we are near the end. That means stringent capital controls," he said. In Washington, the White House said it had no intention of easing pressure on Russia to halt the freefall. "It is President Putin's decision to make. The aim is to sharpen the choice that he faces," said White House spokesman Josh Earnest yesterday. After years of bluster and suggestions by Mr. Putin that the US is a paper tiger, the Kremlin is now coming face to face with the cataclysmic consequences of what it has done by invading Ukraine and changing Europe's borders by force.

As somebody who has championed science all his career, carrying a lot of water for the profession against its critics on many issues, I am losing faith. Recent examples of bias and corruption in science are bad enough. What's worse is the reluctance of scientific leaders to criticize the bad apples. Science as a philosophy is in good health; science as an institution increasingly stinks. This past week has seen three egregious examples of poor scientific practice. The most recent was the revelation last week that scientists appeared to scheme with environmental activists to get neonicotinoid pesticides banned, rather than open-mindedly assessing all the evidence. Second example: last week, the World Meteorological Organization (WMO), a supposedly scientific body, issued a press release stating that this is likely to be the warmest year in a century or more, based on surface temperatures. Yet this predicted record would be only one hundredth of a degree above 2010 and two hundredths of a degree above 2005 - with an error range of one tenth of a degree. In any case, the year is not over with 16% of the 2014 data not yet recorded, so why the announcement now? Oh yes, there's a political climate summit in Lima this week.

China's stock market boom has reached outright mania, with equities galloping higher at a parabolic rate, despite threats of a crackdown by regulators and the continued slowdown of the national economy. The Shanghai Composite Index has risen 32% in the past six weeks, blowing through 3,000 to a three-and-a-half-year high even though corporate earnings are declining steeply. The China Securities Regulatory Commission said late last week that it would "increase market supervision, resolutely crack down and earnestly safeguard normal market order." It warned that stock manipulators had been "raising their head" and would be dealt with. The cautionary words have been ignored by retail investors as they throng brokerage offices, lured by momentum trades. For the stock boom comes as Chinese industry battles with massive overcapacity in everything from steel to shipbuilding, coal output, cement and solar panels. The bottom line is that it may be impossible for China to deflate its epic bubble painlessly.

Saudi Arabia and the core OPEC states are taking an immense political gamble by letting crude oil prices crash to $66 a barrel, if their aim is to shake out the weakest shale producers in the US. "The resilience of US shale may prove greater than the resilience of OPEC," said Alistair Newton, head of political risk at Nomura. There is no question that the US has entirely changed the global energy landscape and poses an existential threat to OPEC. America has cut its net oil imports by 8.7m bpd since 2006, equal to the combined oil exports of Saudi Arabia and Nigeria. OPEC has misjudged the threat. As late as last year, it was dismissing US shale as a flash in the pan. Abdalla El-Badri, the group's secretary-general, still insists that half of all US shale output is vulnerable below $85. This is bravado. US producers have locked in higher prices through derivatives contracts. Noble Energy and Devon Energy have both hedged over three-quarters of their output for 2015. Further, efficiency is improving and drillers are switching to lower-cost spots, confronting OPEC with a moving target. "The (price) floor is falling and is not nearly as firm as the Saudi view assumes," says Citigroup.

Five million Swiss voters will decide on Sunday (11/30) whether to force the Swiss National Bank to repatriate all its gold from vaults in Britain and Canada, boost its holdings of bullion to 20% of foreign reserves and then keep the metal forever. The "Save Our Swiss Gold" referendum is a valiant attempt by Switzerland's army of gold bugs -- and the populist Swiss People's party (SVP) - to lead the world back to the halcyon days of the international Gold Standard. It is a primordial scream against a quantitative easing and money creation a l'outrance (at all costs) by the leading central banks. Yet there is a snag. The Swiss National Bank (SNB) is the biggest printer of them all in relative terms, far outstripping the Bank of Japan, let alone the US Federal Reserve or the Bank of England - mere amateurs at this game.   At one stage it was mopping up half of the entire sovereign bond issuance of the eurozone each month, a scale of action that the European Central Bank's Mario Draghi can only dream of. You have to smile when you hear Swiss gold enthusiasts complaining that these foreign bonds - bought with electronic fiat francs created out of thin air - are now losing value as the euro slides against the dollar. But then we all suffer from cognitive dissonance.

In his speech on September 11 announcing that the US would commence limited operations against Islamic State, US President Barack Hussein Obama insisted, "ISIL, [i.e. ISIS or Islamic State] is not Islamic. No religion condones the killing of innocents, and the vast majority of ISIL's victims have been Moslem."  To be sure, it is hard to see how any human faith can countenance IS's actions. For the past several months, on a daily basis, new videos appear of IS fighters proudly, openly and wantonly committing crimes against humanity. This week for instance, a video emerged of an IS slave market in Raqqah, Syria, where women and girls are sold as sex slaves to IS fighters.  Despite the glaring contradiction between divinity and monstrosity, the fact is that IS justifies every single one of its atrocities with verses from the Koran. IS referred to its sex slave market in Raqqah for instance as the "Booty Market... for what your right hands possess." The phrase "what your right hands possess" is a Koranic verse (4:3) that permits the sexual enslavement of women and girls by Moslem men. By contrast to what he says about IS, throughout his tenure in office, Obama has gone out of his way to mainstream Moslem extremists. This has taken the form of granting senior appointments to people aligned with the Moslem Brotherhood. Further, Obama has befriended radical Islamic leaders who openly support terrorism, including Turkish dictator Recep Tayyip Erdogan and the emir of Qatar, Hamad bin Khalifa Al Thani. How are we to explain this seeming anomaly?

Since he assumed office nearly six years ago, US President Barack Hussein Obama has been dogged by allegations of managerial incompetence. Obama, his critics allege, had no managerial experience before he was elected. His lack of such experience, they claim, is reflected in what they see as his incompetent handling of the challenges of the presidency. In everything from dealing with the Congress, to reining in radical ideologues at the IRS, to handling the chaos at the Mexican border, to putting together coordinated strategies for dealing with everything from Ebola to Islamic State (IS), Obama's critics claim that he is out of his league. That he is incompetent. But if Israel's experience with him is any guide, then his critics are the ones who are out to sea. Because at least in his handling of US relations with the Jewish state, Obama has exhibited a mastery of the tools of the executive branch unmatched by most of his predecessors. Obama is a master of mendacity, a virtuoso of malciousness.  Consider two recent news stories:

It took two years for crumbling oil prices to bring the Soviet Union to its knees in the mid-1980s, and another two years of stagnation to break the Bolshevik empire altogether. Russian ex-premier Yegor Gaidar famously dated the moment to September 1985, when Saudi Arabia stopped trying to defend the crude market, cranking up output instead. "The collapse of the USSR should serve as a lesson to those who construct policy based on the assumption that oil prices will remain perpetually high. A seemingly stable superpower disintegrated in only a few short years," he wrote in 2007. Lest we engage in false historicism, it is worth remembering just how strong the USSR still seemed. It knew how to make things. It had an industrial core, with formidable scientists and engineers. Vladimir Putin's Russia is a weaker animal in key respects, a remarkable indictment of his 15-year reign. He presides over a rentier economy, addicted to oil, gas and metals, a textbook case of the Dutch Disease. "Russia is already in a perfect storm," says Lubomir Mitov, Moscow chief for the Institute of International Finance. "Russia is fundamentally crippled. They have outsourced their brains and lost their technology. It looked as if Russia was strong during the oil boom but it was an illusion and now they are in an even worse position than the Soviet Union," he says.

So ingrained is the bad-news bias of the intelligentsia that the plummeting price of oil has mostly been discussed in terms of its negative effect on the budgets of oil producers, both countries and companies. We are allowed to rejoice only to the extent that we think it is a good thing that the Venezuelan, Russian and Iranian regimes are most at risk, which they are, and which is indeed good news. Yet by far the greater benefit of the oil price fall comes from the impact on consumers. The price of Brent crude oil in Europe has fallen from about $115 a barrel in June to about $86 today (10/22), while crude in the US is at $82. That will make a tank of gas cheaper (though not by as much as it should, because of taxes) but it will also make everything from chairs to chips to chiropractic cheaper too, because the cost of energy is incorporated into the cost of every good and service we buy. The impact of this cost deflation will dwarf any effect of, say, a fall in the price of Exxon shares in your pension plan.

France may look like the sick of man of Europe, but Germany's woes run deeper, rooted in mercantilist dogma, the glorification of saving for its own sake, and the corrosive psychology of ageing. "Germany considers itself the model for the world, but pride comes before the fall," says Olaf Gersemann, Die Welt's economics chief, in a new book, The Germany Bubble: the Last Hurrah of a Great Economic Nation.  (Released last month in a German edition, hopefully an English edition will soon follow.) Mr. Gersemann says the Second Wirtschaftswunder - or economic miracle - from 2005 onwards has "gone to Germany's head". The country has mistaken a confluence of exceptional events for permanent ascendancy. It cannot continue to live off exports of capital goods to China and the BRICS as they hit the buffers, or by stealing a march on southern Europe through wage compression, a zero-sum game. Marcel Fratzscher, head of the German Institute for Economic Research (DIW), makes a parallel critique in his new book, Die Deutschland Illusion, no translation needed. It is the self-deception of a country "resting on its laurels," prisoner of the "household fallacy" that economies are like family budgets, and falsely reassured by the misplaced flattery of foreigners who rarely look under the bonnet at the German engine below.