Posted on 03/06/2015 5:40:02 AM PST by elhombrelibre
Russian President Vladimir Putin signed three new decrees into law that will slash government salaries — including his own and that of Prime Minister Dmitry Medvedev — by 10% from 1 May.
The government has also announced plans to cut the number of government officials by 5% to 20%.
The measures are part of the government's emergency plan to address collapsing revenues due to the fall in global oil prices and economic sanctions imposed on the country. Crude oil is currently trading around $60 a barrel but the federal budget was based on oil prices of $100 a barrel, leaving a big black hole in the state's finances that needs to be plugged.
The news comes a week after Russian Finance Minister Anton Siluanov asked parliament to approve spending 3.2 trillion rubles (£34 billion) from the Reserve Fund, one of Russia's sovereign wealth funds, as part of his so-called anti-crisis plan. That figure is more than half of the value of the fund and well in excess of the 500 billion rubles that the government had initially planned to draw down.
(Excerpt) Read more at businessinsider.com ...
Translation from libspeak...Russia slashes government spending.
Yeah, in your mind Putin’s a brilliant fiscal conservative and a paladin of the Christian faith. His time in the KGB was just a trick to take over the country and rid it of atheism. And he’s stoic without much wealth because it’s all about the public service. He’s not one of the richest men in the world. That’s a canard. He’s poorer than the Clintons. Ha. Truck, you’re always a hoot.
I assume no one wants to buy bonds or invest in their debt. Doesn’t that make sense? I know Putin has his Putinista fan club on FReeRepublic, but most people are well aware that Russia’s become a junk bond.
What interest rate on a ruble-denominated Russian 10-year treasury bond would make you indifferent between buying it and a U.S. Treasury bond of the same duration? Your answer to that question will go a long way towards an understanding of the difference between our situation and the one in Russia.
Thank you. I wasn’t thinking that all the way through.
The unique status of the US dollar as the world's reserve currency is what allows the US government to greatly expand its monetary base without serious consequences. Other countries must hold US dollars to conduct trade.
Sort of taking advantage of the third world for our continued operation.
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