NEW YORK (TheStreet) -- If the market were to write a letter to the Russian president, it would begin like this: "Dear President Putin. It's not the ruble. It's you."
The ruble's ride has been unbelievable. In the space of a few hours on Tuesday it went from 64 to 70 to the dollar -- then it broke 80. It currently trades around 61 after rumors that the central bank was buying the ruble to prop it up.
As long as the price of oil remained relatively high, it looked like Russia could do no wrong (or nothing wrong enough to warrant a currency crisis). Invading a neighbor and almost causing its economic collapse was not enough for investors to sell its currency. But the rapid fall in the oil price surfaced a lot of unpleasant truths about Russia the markets had somehow managed to ignore.
First of all, of course, it's the geopolitics. Not just in Ukraine but elsewhere in the region, Vladimir Putin's Russia has bullied smaller countries, preventing them from forging closer ties with the European Union and NATO, all the while blaming the West for attempting to gain influence over what it still sees, anachronistically, as its region of influence.
Until recently, the Western sanctions had little effect on the country, which has strong foreign exchange reserves and is an exporter of the commodity that, until a few weeks ago, was very much coveted.