Posted on 08/28/2014 8:43:36 PM PDT by Tau Food
As Russia scrambles to refinance maturing debt, stabilize the ruble, and battles to halt the collapse of investment in new plant and equipment, Russia will draw down its official reserves and rainy-day funds, capital flight will accelerate, perhaps to unsustainable levels, and economic growth will collapse, perhaps as much as during the financial crisis of 2009. The longer the sanctions stay in place, the worse the consequences.
. . .
Vladimir Putin has maintained his hold on power via an implicit bargain that he will produce rising standards of living and ensure that pensions and wages are paid on time. If he breaks this bargain, he will be weakened, how severely we do not know. His venture into Ukraine jeopardizes this bargain. He has substituted national pride and glory for the pledge of good economic performance, but he claims so far that one will not jeopardize the other. It is for this reason that he pooh-poohs claims that the War of East Ukraine will hurt Russians in their pocketbooks and at their dinner tables.
(Excerpt) Read more at forbes.com ...
'We have a nuclear option that few talk about: throw Russian financial institutions out of the SWIFT system and watch them collapse."
They may just set up an alternative means to get their gold, oil, lumber, gas, minerals, etc. to those countries that need them.
Russia has nothing to fear from the West; their assets are closer to Asian markets anyway.
They are working on a workaround
http://www.reuters.com/article/2014/08/27/russia-banks-swift-idUSL5N0QX33W20140827
Low oil prices are whoopin’ up on the Ruskies.
Yes but they get their loans at the Western credit windows which are being cranked down on them.
For the right price, any of the resource-starved countries of Asia will extend credit. Asia is accumulating US dollars; now they can lend them out themselves.
Crimea has suffered heavily from being occupied by Russia, since cruise ships no longer stop there and well-established lines of goods have been shut off by Russia’s sanctions they face shortages of many goods.
pass on those hot potatoes
That is understandable, but Crimea is one small part of it. Much of Russia’s resources are in the east, and those can still reach markets there.
The Russian economy is already experiencing distress as voiced by one of the Russian ministers the other day. They don’t have the money to fight a protracted war with the Ukraine. As the price of oil drops it will only get worse.
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