Putin’s getting smart. It’s nice to see a head of State do something that makes sense economically. All signs point to the fact that whoever is running Russia’s economy – and it probably is not Putin – really knows what he, or should I say she, is doing. I believe it is Elvira Nabiullina who’s really running the show, and so far, she’s awesome.

First of all, despite a gigantic Ruble collapse to 78 Rubles to the dollar from 33 earlier in 2014 (we are now at 67), Russia has added to its gold supply. When your currency is in free fall, you don’t generally buy gold. You sell it in order to prop up the value of your currency. But Russia did not do that. Instead, it ate through some of its paper forex, which is to be expected. Nabiullina is intent on keeping Russia’s gold. That is huge, and very good for the Ruble long term.

Second, in response to the S&P (those geniuses who can’t predict a single economic crisis and gave Lehman a AAA rating just before it collapsed) cutting Russia’s bond rating to junk status, Putin (with Nabiullina’s advice I assume) announced a total government spending freeze.

Finance Minister Anton Siluanov announced Tuesday that the government has adopted an anti-crisis plan that will freeze the level of spending. The plan also sees the budget returning to a surplus as soon as in 2017 and the government preparing structural reforms “so that we do not burn recklessly through Russia’s sovereign reserves.”

Wow – a State actually freezing spending in response to an economic crisis instead of printing and bailing out. This is somethin’ else. I love it.

Russia may go through some turmoil until oil prices rise again, and they will, but Nabiullina, or whoever is really running the show, is setting Russia up to devour the West when its their currencies’ turn to collapse. With the ECB printing €50B a month and the US M2 money supply growing at close to 7% annually, oil will eventually turn back up.

When it does, the Russian bear will roar.  Right now its hibernating. But not for long.

For those interested in placing bets on Russia, the relevant ETF is RSX.