Memories of the collapse of the Russian Ruble continue to linger in the minds of many, twenty years after the ex-soviet power’s currency lost 27% of its value against the dollar in one day, dubbed as “Black Tuesday.”

The slump was not linked at the time to any Western sanctions or a global economic downturn, but rather to poor planning and blunders from the Russian administration.

And today, signs of panic have begun surfacing among many citizens as well as finance and business circles in Russia as the Ruble touched, within only nine months, record lows of 47 against the dollar from an earlier 25, before Western sanctions and the crisis in neighboring Ukraine.

The Russian economy appears to be smoothly heading towards collapse, signalling a crisis felt among elite decision-makers in Moscow who were dissatisfied by the latest step to let the Ruble exchange rate float freely, a move that brought no significant benefit.

Government employees are complaining of delayed salaries and many have been silently laid off over expenditure pressures. Meanwhile, food prices are rapidly increasing amid a hysterical obsession for buying basic supplies, creating an atmosphere that recalls images of long queues of consumers lined up outside stores and petrol stations in the late 1980s and early 1990s.

The Russians are still haunted by similar scenarios from the past when all their savings evaporated into thin air. They are now rushing to empty their bank accounts amid reports of government plans to increase taxes due to the lack of liquidity in the markets, prompted by the reluctance of investors to implement new projects on the backdrop of political uncertainty and isolation overshadowing the Kremlin following its war on Ukraine.

The Russian Central Bank announcement of the pull out of 129 billion dollars by investors reflects the gravity of the looming financial catastrophe accompanied by the shrinking of cash reserves since the start of 2014 to 400 billion dollars, down from 510 billion dollars.

The Russian government has begun shyly preparing public opinion for the emerging crisis by talking about the need to anticipate a fall in income with zero growth in 2015, and an increase in unemployment and inflation. It meanwhile appears incapable of finding solutions to the economic dilemma caused by its reckless political choices.

Vladimir Putin’s building of a federal budget highly dependent on oil and gas revenues, his attempts to turn a blind eye to the spread of corruption and overlooking the reality that Russia extends beyond Moscow and St. Petersburg, are among his main problems.

He could not go on endlessly using gas as a tool to pressure Ukraine and Europe, especially with some countries, such as Lithuania, innovating new methods to break free from their reliance on Russia’s gas.

At home, the honeymoon between the master of the Kremlin and the businessmen and oligarchs he had long kept tucked under his arm, is nearing to an end.

His recent economic decisions and the financial consequences of his confrontation with the West are sparking ire among this segment of society which he had, throughout more than a decade, tamed and gained its loyalty.

Finance Minister Anton Siluanov might be used as a scapegoat as crisis hit the structure of Russia’s economy even before Western sanctions and the fall of oil prices.

However, nobody is expecting a dramatic economic collapse in the near future. The head of the Kremlin and his circles in the world of business and finance hold many playing cards that will enable them to remain on one table with the world’s largest economies and secure relative internal stability.

But this is one thing and ending the crisis and restoring the former momentum is quite another and demands much work, including a change in the mentalities drawing the country’s policies. Of course, this is not expected given the structure and composition of the regime running Moscow.

In the end, the voice of weighed financial policies must overpower pseudo-political sentiments the Kremlin pumps into the hearts and minds of Russians, creating foreign enemies to blame for their country’s deteriorating political and economic status, which have become largely dependent on a military merit gained from harassing neighbouring nations and igniting chaos in Eastern Europe and Caucus, and even violating Europe’s airspace, in another indication of a moral decline that will steadily drive Russia towards an unfortunate end.

Rauf Baker is a Dubai-based journalist who specialises in Eastern European Affairs.