Financial chaos in Russia is giving investors flashbacks to the summer of 1998.

That was the year Russia defaulted on its debt and devalued the ruble, creating huge losses for investors. And it didn't stop there: the "Moscow meltdown" infected emerging markets around the globe and even caused America's S&P 500 index to plunge about 20% between July and October of 1998.

Conditions today look a lot like they did back then: the Russian ruble is collapsing under the weight of plunging oil prices, forcing the central bank to dramatically hike interest rates.
Despite the eerie similarities, Russia's financial troubles are unlikely to crash global markets this time around.
One major difference between 1998 and today is that tough sanctions on Moscow have somewhat insulated Western investors from what's ailing Russia
.The sanctions regime has "reduced the risk for financial contagion considerably. This is not 1998. You don't have the same level of interconnectedness," Michael Levi, a senior fellow at the Council on Foreign Relations, said at a Control Risks seminar on Wednesday in New York.
Russia is a 'pariah' today: Russia simply doesn't have the ties to the rest of the financial world anymore to really make it sick.
"It's basically a pariah state right now. Foreign investors have fled," said Win Thin, global head of emerging market strategy at Brown Brothers Harriman.

There are other key differences between today and 1998.
Learning from its last default, Russia has stockpiled a war chest of about $416 billion in currency reserves. That's more than enough to cover all of the debt due in the next year.
It also allows Moscow to deploy cash to defend the ruble, as it did again on Wednesday.