Vladimir Putin may succeed in bringing back the “good old days” of the Soviet Union after all. Despite emergency measures over the last two days to prop up its currency, the ruble crashed again today against the dollar and nearly returned to its post-Soviet low set Monday. The demolition of the ruble, combined with the harsh sanctions over Putin’s war in Ukraine, now threatens the standard of living in Russia, CNBC reports:

The currency had found some support after Russian authorities ordered exporting companies, among which are some of the world’s biggest energy producers from Gazprom to Rosneft, to sell 80% of their forex revenues on the market, as the central bank’s own ability to intervene on currency markets was curbed.

But the ruble’s brief gains still left it well shy of the 75 to the dollar mark and 87 to the euro it traded at before Russia recognised two breakaway regions in eastern Ukraine and sent its troops into the neighbouring country last week.

After a short-lived recovery in early trade, the currency had fallen 5.4% to 99.73 against the dollar by 1500 GMT in Moscow, and lost 3.5% to 109.68 versus the euro, slipping back towards Monday’s record low of 122.

On the EBS electronic trading platform, however, the ruble was pegged at 109.5 to the greenback, although still a distance from the all-time low of 120 hit on Monday.

Putin’s propaganda machine might keep Russians in the dark over his war in Ukraine, but its impacts will become clear very quickly to everyone. Inflation had already been high, but the supply impacts of sanctions may send Russia into an entirely new level of hyperinflation:

The weak ruble is set to hit living standards in Russia and fan already high inflation, while Western sanctions are expected to create shortages of essential goods that people in Russia have become used to, such as cars.

The Institute of International Finance (IIF), a trade group representing large banks, also warned that Russia was extremely likely to default on its external debts and its economy would suffer a double-digit contraction this year.

Forbes reports that Russia’s central bank apparently knew enough to start selling off its foreign currency reserves the day before the invasion of Ukraine. Even that advance notice hasn’t helped avoid the ruble turning into rubble, and now the RCB is beginning to panic. That desperation, writes Maya Rodriguez Valladares, only ends one way — badly:

One day before the invasion, the Bank of Russia, Russia’s central bank had intervened in the foreign exchange market by selling $1 billion dollars to provide support for the ruble. The Bank of Russia sold more foreign currency also on Friday. On Monday, the ruble began at 83.53 to the U.S. Dollar and as announcements of different sanctions and divestments began, the ruble plunged over 30% in less than four hours to RUR 109. Russia has a long history of local currency crises and devaluations. Yet, even in the context of that history, the Bank of Russia’s significant sales of foreign currency will go down in foreign exchange market history books as some of the most ineffectual moves conducted by a foreign exchange department of a central bank.

Russia’s foreign exchange and interest rate measures to calm markets are all strong signals of desperation. The Russian central bank raised interest rates to over 20% on Monday from its Friday level of 9.5%. That 111% rate rise did not and will not calm domestic or foreign market participants. I have seen this movie several times in my career. It always ends badly. I started my career at the Federal Reserve as a foreign exchange analyst and witnessed the desperate interest rate hike moves by European central banks as they tried to stem foreign exchange outflows during the Nordic crisis and the UK withdrawal from the European Exchange Rate Mechanism. The more central banks raise rates significantly, the more corporate executives and ordinary citizens run out the door simultaneously. Fear is palpable, moves quickly, and is contagious.

In other words, ordinary Russians will get screwed by Putin’s war, and they will quickly realize it. What about the oligarchs that form Putin’s political support? A sudden interest in crypto in Russia might show that they’re looking for workarounds to Western sanctions:

Data released this week from Kaiko shows that volume for trading Bitcoin and stablecoins like Tether (USDT-USD) jumped in the last several days within Ukrainian and Russian markets, as the Ruble tumbled in global markets to mere pennies on the U.S. dollar.

In recent sessions, digital tokens have behaved more like risk-sensitive assets instead of the alternative asset class they’re supposed to be – including Bitcoin, which some market players view as a safe-haven.

However, the move to sanction Moscow – including shutting Russia out of the SWIFT global financial system – appears to have triggered a sentiment shift in favor of crypto. Among some crypto investors, a theme has emerged that argues a government-led financial crackdown is boosting the advantages of the more decentralized digital token sector.

That might make for an interesting escape hatch, but it’s limited. Governments do not do business in crypto — they use hard currencies, either their own or some sort of reliable benchmark like the US dollar or euro. Similarly, international trade takes place using traditional currencies. A shift of assets to crypto could help the oligarchs keep their liquid assets from being frozen or seized and allow them more freedom for personal purchases, but it’s not going to do much for their business interests.

Also worth noting: the Russian stock market stayed closed for the second straight day after crashing on Friday. The longer it stays closed, the more panic will build up, especially given the bite sanctions will have on investment in Russia. Or for that matter, just the stigma of doing business with Russia at all from anywhere except China and a few other rogue states.

All of this prompts the question, again, of what Putin hopes to gain from his attempt to swallow Ukraine whole. He has clearly miscalculated the West, the Ukrainian forces and populace, and his own military strength. At this point, though, there’s no possible way that a forced anschluss of Ukraine will pay off for all of the economic and diplomatic losses Russia has already suffered, let alone the long-term costs of isolation. Putin could still pull back to the Donbas partition he created and declare some sort of victory, but apparently the sunk costs of his insane land war in Europe is preventing any kind of rational reassessment on his part.

That bodes ill for everyone in the region, but hopefully most of all for Putin himself. His imperial ambitions might have sounded good to the oligarchs in theory, but the disaster of Putin’s war will have them looking for some other option soon — before their wealth burns up in the hell Putin has opened for Russia.