Home mortgages aren’t Russia’s debt problem. Russian companies have a lot of foreign debt denominated in US Dollars and must repaid in US Dollars. That is Russia’s problem. Russia has without success spent over a hundred billion dollars, over a quarter of its cash reserves in an attempt to prop up the Ruble. Capital is fleeing the country because it has become an unstable pariah state. And that will not change even with Chinese intervention. If China wants to spend a quarter of its foreign cash reserves to prop up Russia so be it. But I don’t think the Chinese are that foolish. China has its own very serious economic problems. If Putin remembers the Cold War, he also remembers the Sino-Russian border conflicts and the Sino-Russian border war of 1969. Russia and China have no innate love of the other and both are fully aware of their histories. Here is something else to consider, China’s economy is slowing. Its demand for oil is waning and China has one of the slowest growing populations in the world, growing at only a small fraction of a percent each year. China and Russia do share a mutual desire for the lands of neighboring states and resentment of American hegemony. However, China and Russia will never rival the US, unless and until their societies become more open, transparent, and trustworthy and neither Russia nor China is willing to pay that price tag. No, I think things are going to get really tough in Russia. Since Putin controls the Russian press and has ousted the foreign press, and jails his political opponents after confiscating their wealth or kills his political opponents with a dose of radioactive poison, it is little wonder his job approval remains high.
Both true (Dollar mortgage are big problem for 3 % of home owners, not Russia.) If I recall correctly the total corporate debt (some long term) is about 600 billion dollars. I heard some "talking heads" recently and at least one suggested that Putin would soon do the "Argentine solution" - not renounce any debt, which is not Russia's but corporations - just make paying the interest due illegal* - not much to lose as already they can not borrow more Then the discussion turned to how much damage that would do to those who, banks and insurance companies, mainly I think, that lent the money. One point was the terrible paper loses - if marked to market (as I think is now the law or US accounting regulations) who would go "belly up" & who could raise capital to meet requirements, etc. compensating for the assets wiped off their books. What would the chaos do to already high Fed propped up stock markets etc. (even your retirement plans). If Putin did that, it would be like when Argentina did - at least a decade before any one (except China with loans secured by title to in-ground resources) would lend to them again, but Argentina is now floating bonds with success. Putin might prefer this solution to selling Russia's natural in-ground wealth to China as Venezuela has done. * That keeps a lot of dollars inside Russia and launches a thousand or so lawsuits filed in Western courts against Russian based corporations (many of them just subsidiaries of US corporations). As they say: "If you own the banks $100 and can't pay, you have a problem, but if you owe the 5 billion dollars and can't pay, the bank has a problem." If that should happen, we will quickly see if the "stress tests" US banks passed meant anything or if we go back into a even bigger than before, Bank Bail Out mode (I.e. screw the tax payers and save the banks.) We do, indeed, live in "interesting times."
This is an interesting article on how Russia recruits and pays Russians to fight in Ukraine. Apparently Russia is paying these mercenaries between 1K dollars and 4k dollars per month to fight in Ukraine. That is a lot of money in Russia. And we have an admission that the mysterious Russian aid trucks were nothing more than a deception in order to bring in Russian fighters and military equipment. http://www.newsweek.com/how-russians-are-sent-fight-ukraine-296937
Eating Less for Mother Russia It's hard not to laugh, really. Deputy Prime Minister Igor Shuvalov, one of the richest men in Russia, had his 'we shall not go quietly into the night' moment.. Speaking at the Davos Economic Forum on Friday, Deputy Prime Minister Igor Shuvalov said Western sanctions had united Russians around their leader, which would make it easier to push through painful reforms. “We will withstand all hardships in this country, eat less food, use less electricity ... but if we feel that someone outside wants to change our leader against our will ... we will be more united than ever.” The West simply “does not understand the Russian mentality”, Shuvalov said, denying that the crisis and sanctions would destabilise Putin’s grip on political life or sway his position on Ukraine. “If a Russian feels external pressure, he will never give his leader up,” said Shuvalov, who is believed to be one of the richest men in the Russian government. Shuvalov’s remarks on austerity went viral, with some in the opposition posting photographs on Twitter of luxury mansions that he allegedly owns. Ah yes, because a hungry populace will really support its leaders when said leaders are living it up in luxury. There is something to be said when one of the richest men in the country declares "we" will withstand all the hardship, because he is a "we" who will feel the pinch of eating less and using less electricity? Sadly, Putin, through direct manipulation of the State controlled media and annexing other countries has a cult following. So they just might eat less for Mother Russia. Leaders who maintain such control, who neutralise alternative or the opposition, are always dangerous. How long it will last remains to be seen.
But, but... Based on what BillyT's always writing about China, I thought they had an infinite supply of slave labour, an infinite supply of coal, oil and grain, and Americans could afford to buy an infinite number of plastic lawn chairs at Wal Mart. Even if foreign markets are somewhat maxed out, we know it's just as easy for a hard-working upper-middle-class doctor to boost their productivity by 8% a year as it is for the guy who works part-time 6 hours a week delivering pizza, and when it comes to domestic business growth, greedy despots with addictions to wine and prostitutes tend to make the best entrepreneurs. So you're saying China can't just flush baby 3-century US down history's toilet whenever their benevolent leadership might one day find it convenient? I'm calling out your bluff, Yankee... Please Register or Log in to view the hidden image!
Uh, this thread is about Russia. The post you reference was about Russia...not China...oops. Please Register or Log in to view the hidden image!
But I thought China was potentially going to come to their rescue and then Obama would have to go home in defeat and spend the next decade cleaning the poo stain off his pants. Or if you still don't get my point, I'm saying America and its allies can and should extend the sanctions to China, if China seeks to bail Putin out or participate in any other forms of territorial aggression. BillyT's Skynet China bank world takeover currency thingy can wait.
I guess I didn't get your point. I think extending sanctions to China would be a little premature, but I agree, it should be on the table as you suggest if China attempts to bail out Putin. China has its own problems. China is trying to grow itself out of a potentially devastating credit and real estate bubble. So while China's leaders would love to feed their egos and play big man on campus by rescuing Putin, I think they are going to be too fixated on their own domestic woes to take on Putin's problems. http://www.theguardian.com/business/2015/jan/09/china-economic-crash-bank-of-america-analysts
I expect level heads to prevail, I don't see why China would prefer trade relations with Russia over the US, but the Western world must nonetheless be ready to change the game if China finds encouragement in Putin's relative impunity. For decades, China and Russia have been attempting to build all sorts of "no Americans allowed" treehouse clubs in the region, but those coalitions fall apart every time as soon as the various dictators realize that their partners are even more bossy than the US. I wouldn't worry about any form of alliance sprouting up that could actually challenge the EU, NAFTA and NATO on economic or military grounds, but the fascists are also counting on us standing by and not using our assets, as we can see in Ukraine and other potential flashpoints such as Kazakhstan, so we must be thoroughly prepared and willing to take a few blows of our own.
More sanctions are on the way. Putin is blaming Ukraine when he speaks to Europeans. When he speaks to domestic audiences he blames the US and the EU. http://www.bloomberg.com/news/2015-...ions-on-russia-as-clashes-engulf-ukraine.html
Still not enough. We should be aiming for a 90% Russian recession rather than 5% and, since they're massacring Ukrainians anyway, I don't see why NATO shouldn't simply draw the red line there in Ukraine and drive Russia out now, rather than waiting for Poland, Latvia, Sweden or Finland to come under attack- if Russia insists on a conventional war or even a nuclear one, we might as well be the ones to set the pace. If Putin were really willing to commit global nuclear suicide for his land grabs next door, why wouldn't he be willing to do the same thing when he's ready for his next course?
The US has arrested a Russian spy. Boy, isn't this reminiscent of the Cold War! I say it is past time to cut them off from the international payment system (SWIFT). http://www.independent.co.uk/news/w...ed-russian-spy-ring-in-new-york-10004279.html
Probably; but EU action must be unanimous and Greece is threating to disapprove more sanction at the meeting tomorrow. See: http://www.sciforums.com/threads/wi...-thread-now-a-poll.113641/page-2#post-3269362 This may be just to gain a little leverage in the negotiations about restructuring the debt, or a real POV of the very left-wing government, or both.
Lagarde noted in that interview, that 20% of Ukraine's GDP* was generated in the rebel controlled areas. I note they are expanding, especially with the rebel capture of the airport, and the probably capture of the now surrounded government troop garrison at Debaltseve.** That will end the government's "finger of control" extending into rebel area - and "straighten out" the boundary line between the opposing forces - easier for rebels to protect. * The Russian speaking eastern part of Ukraine has always be the more industrialized part. That is where almost all of the heavy industry is, including a tank factory, and factories that make major components of Russia's helicopters. - Unique suppliers of some critical parts. ** More on that garrison here: http://www.sciforums.com/threads/russian-economy.142950/page-7#post-3268970 Debaltseve, not Mariupol, is the rebel's important target - a few Grad rockets hitting in Mariupol drew government forces there - a rebel diversion that worked. Kiev's supply line to their troops (hundreds, if not ~1000) at that garrison is now cut.
The rebels seem to be fighting in Donetsk's northern and western suburbs in hopes of pushing Ukrainian artillery out of shelling range of the city. (Shelling has been a daily occurrance, perhaps as pay-back for the rebel attacks on the airport.) I wouldn't be surprised if a lot of the areas's industrial infrastructure was in those suburban areas too. Delbaltseve sits atop the main road and rail links between Donetsk and Luhansk. The Russians are very aware of that, I'm sure. I hear several thousand, the Ukrainians have been reinforcing it. I assume that the rebels hope to turn Delbaltseve into this war's Stalingrad, a devastating loss of men and materiel (the rebels say that they want to turn it into a "cauldron") that might demoralize the Ukraininan army (it's mostly conscripts), force concessions, and perhaps even bring the current Kiev government down. That's my guess as to the rebel strategy in this new offensive, what they are trying to achieve on the larger scale, beyond the tactical objective of pushing the Ukrainian army back away from their rebel cities.
Up date on Rebel gains near and in Delbaltseve: * probably why Debaltseve has been "without power, water and gas supplies for more than a week." IMO, seize rather than attack the large Government's military garrison / base in Debaltseve, is the better approach for the Rebels, especially if they tell the soldiers there that if they defect with their weapons intact that they will allowed transit back to areas still under Kiev's control (or the option to switch sides). It is becoming clear, as I suggested a few days ago, that Mariupol being hit by a few grad rockets, was a diversion designed to draw government soldiers and heavy weapons there, to facilitate the capture of Debaltseve and the weapons there. Russia is no doubt, supplying tactical advice as well as weapons.
Russia is palling up with its fellow pariah states. I mean who wouldn't want to have North Korea as your bosom buddy. http://www.businessinsider.com/russia-wants-military-drills-with-north-korea-2015-2
