Posted on 08/27/2008 8:56:29 PM PDT by Tailgunner Joe
Russian officials have sought to explain away the $16.4 billion outflow in foreign reserves in the week of the invasion of Georgia and also the 32 percent drop in Moscow's stock market since Putin began expressing his displeasure with the Mechel coal group in May. Mechel shares alone lost $8 billion after Putin's first remarks. Finance Minister Alexei Kudrin claimed Friday that the outflows had stopped.
But Russian debt and equity markets also have gone into decline since the conflict with Georgia began Aug. 8, with yields on domestic ruble bonds increasing by up to 150 basis points over the last month. That is the equivalent of a 1.5-point jump in interest rates, the kind of panic measure that few central banks would risk taking except in extreme circumstances.
The pace of capital flight from Russia has been the highest since the 1998 collapse of the ruble, when Russia defaulted, and the amount of cash leaving the country in the second week of August was the highest on record.
There is still plenty of cash left. Russia's central bank, which reported the $16.5 billion decline last week, still reckons to have $581 billion in reserves, money being stored away for the rainy day when the oil runs out and the gas flow starts to falter. This may come somewhat sooner than many think.
Kudrin also noted last week that the decline in oil prices could force Russia to start spending its savings, known as the Reserve Fund, in 2015 because "oil and gas revenues will be insufficient."
(Excerpt) Read more at metimes.com ...
>”The market is vulnerable to foreign capital flight,” warned investment bank Troika Dialogue. “The major Achilles heel of the Russian market is that there is very little domestic long-term capital.”
this is getting interesting!
rather graphic!
What use has russia ever had for capital? It has always existed exclusively upon enslaving productive peoples, looting conqured lands and holding them for ransom, bleeding its own peasants unto death and defauling upon any debts independent states were foolish or cynical enough to hazard there
It’s what happens when you have a thug leading the country that decides to play with Fascism.
$581 Billion in savings? Doesn’t the US spend $700 Billion a year just on oil? In the Georgian Poker game they are holding a pair of 2’s and we’re folding! Let’s unilaterally send a peacekeeping division into Georgia, they will blink the moment the first boots step off those ships.
Will there still be a Russia in 2015?
oh HO!! Now we know what they are up to.
Exactly.
Yes. They get there moment in the sun but as a nation are largely destroyed by 2020.
They made a fortune the quick and dirty way but it was only a splash in the pond.
Russians will be found begging on the outskirts of Tbilisi when your children are young adults.
I sincerely hope so!
Today’s Saint Marry’s day in Georgia. May her blessing be with all of you and us!
PS do you have any older brothers?
No, I am the only son in the family, why?
ROFL!!
MarMema has a daughter.
You're are completely right. They're running out of oil and they need new supplies.
The sad thing is they have gas that could be brought on line in time to bolster their finances as the oil gives out, but they chose just to go take it from somebody else right now instead.
The gas, according to the article (mostly from RUSSIAN sources) says that they will need foreign investment to get that gas on line.
Oooops. Phyrric Putin just may have cut the throat of the golden goose and apparently the more informed of his people are aware of it.
IMO it would be a lot better to have them take care of him than have US end up at war with Russia--at least 70% of whose people don't have a clue what's really happening.
Not that I don't want to see every Russian tank, Chechyn irregular, and ship in Georgia blown to hell, it would just be better if no more innocent, decent people were butchered to bolster Putin's bottom line and keep him propped up in power.
OK Sal, I hear you, Sigh. I'll get on this right away....
I saw the pictures you showed Lasha...
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