On Wednesday, the frazzled Russian Ministry of Finance tried to get a grip on the currency crisis that is annihilating the ruble by announcing through the Russian news agency Interfax that it began selling its crown jewels, the already dwindling foreign currency reserves, in order to buy rubles. It had an impact, at least for the day.

This came after the utterly desperate Central Bank of Russia announced after midnight Tuesday Moscow time that it increased its benchmark rate by 6.5 percentage points to 17%, after having already jacked up rates last week to 10.5%. It was supposed to put a floor under the plunging ruble.

After the shock-and-awe rate increase, the ruble perked up just one tiny bit. For a few moments there might have been hopes that the unstoppable dive could be stopped, that in fact the central bank had this under control. But then the ruble crashed, hitting 80 rubles to the dollar, down 20% from the peak of the prior trading day, and down 56% since August.

Panicked markets had demolished the central bank’s scheme. After Economy Minister Alexei Ulyukayev denied rampant rumors that the government would impose strict capital controls to stop Russians from dumping their rubles in exchange for dollars or euros, the ruble “recovered,” and it ended Tuesday at 68 rubles to the dollar, down 11% for the day.

On the streets, there were signs that Russians had lost faith in their currency after watching how their incomes and savings got decimated. Bid-ask spreads of 20 rubles began appearing at some exchange offices where they offered to sell dollars for 85 rubles but would only buy them for 65 rubles. IKEA furniture stores and other “hard asset” retailers saw a burst in activity as folks were trying to convert their rubles into whatever else they could before these rubles lost their value entirely, and before retailers could catch up with price changes.

They mobbed online stores for the same reason, going after valuable but easily traded electronics that could be bought with increasingly worthless rubles and sold in the EU for hard currency and a profit. In response, Apple began protecting itself. Rather than admitting that it wouldn’t accept rubles any longer because it wasn’t a functional currency anymore, it just shut down its online store in Russia, as it said, “due to extreme fluctuations in the value of the ruble.”

Automakers including GM, BMW, Audi, and Jaguar Land Rover have halted deliveries of new vehicles to Russian dealerships. Other companies are implementing similar measures.

Everyone wants out of the ruble. They consider it dead. Net capital outflows would more than double this year from last year, to $134 billion, the central bank said last week. But that was before the ruble crisis boiled over. Now capital flight is likely to soar.

Next year, it’s going to be tough. The astronomical interest rates, based on the central bank’s 17% benchmark, will crush lending to households and businesses and will strangle the Russian economy. The 50% plunge of the price of oil since June is already hitting the Russian energy industry, which accounts for about one quarter of Russia’s economic output. This is compounded by the sanctions that have blocked Russian companies from Western capital markets and partnerships with Western companies. Russia’s budget is being put through the wringer. And there will be pain.

The Economy Ministry projected that the economy would shrink 0.8% in 2015. But the central bank said that with oil prices averaging $60 per barrel under a “stress scenario,” the economy could swoon between 4.5% and 4.7%. But these scenarios were hashed out before the panicked shock-and-awe interest rate hike.

As the ruble has spiraled into an out-of-control collapse, global banks and currency brokers are getting cold feet, which could add further pressure on the Russian financial system. A number of them announced they’d halt dollar-ruble trading. Why? FXCM, one of the largest among them, told Reuters that Western banks that provide the liquidity for dollar-ruble trades had stopped quoting prices.

Turns out, the largest banks were restricting some ruble transactions and limiting the flow of cash to Russian entities. Even as such moves have become “increasingly widespread,” according to the Wall Street Journal, banks themselves were still trying to profit from the ferocious moves of the ruble:

Such banks as Goldman Sachs Group Inc. this week started rejecting requests from institutional clients to engage in certain ruble-denominated repurchase agreements and other transactions designed to raise cash, according to people familiar with the matter.

The dollar-denominated RTS index of Russian stocks plunged 12% on Tuesday, the worst day since financial-crisis year 2008. It has lost about one-third of its value this month. The largest banks, which are in the middle of this crisis, face systemic risks, corroding loans, deposit outflows, and less demand for their services. Since early July, the RTS index lost 55%.

The stock market in the US, after some initial squiggles, soared on Tuesday, blindly plowing through whatever reality might be in its way. But then at 11:30 AM, suddenly spooked, the rally turned into a nasty sell-off. In those final hours, the S&P 500 plunged 41 points and the Nasdaq nearly 100 points, both down 2% in half a day. It was the sixth day of declines in seven days.

That was Tuesday. On Wednesday, the Finance Ministry tried to re-exert control and manipulate the ruble back to life, at least for a little while, with the announcement that it has begun selling its crown jewels in order to buy rubles. It might be the only motivated ruble buyer of rubles, but hey. On cue, the RTS index soared 15%, regaining what it had lost the prior day. The ruble jumped too. And as I’m writing this, US stocks are soaring. All is well.

But it hasn’t changed the underlying dynamics for Russia: a bevy of sanctions, an economy dependent on oil whose price has plunged by half in six months, a fiat currency that – in a world where everything is manipulated and controlled – is spiraling out of control. Russia is the ninth largest economy, a hair behind Brazil and Italy. It’s facing a currency crisis, an economic crisis, and a banking crisis. And the world’s biggest banks face a potential derivatives crisis if the ruble and Russian bonds blow up entirely. Hence the whiff of chaos.

The plunge in the price of oil has caused Wall Street to promise a big boost to US GDP. But what have these folks been smoking? Read…   This Is Why the Oil-Price Crash Will Maul the US Economy

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