The Demolition of Russia's Economy
- Thread starter gwb-trading
- Start date
Ruble essentially close to where it was before the war started.
Yeh, becoming a world pariah is actually a great economic development plan. Or at least Vlad better hope so. I mean, what could go wrong?
.........but..but... we can pay in rubles and throw in some Buffalo Nickles from Vlad's coin collection.
Russia will likely default with April 4 payment due of $2.2 billion, experts say
https://www.marketwatch.com/story/r...-experts-say-01648317115?mod=economy-politics
Last edited:
The default is likely because we won't allow them access to the accounts for the coupon payments. I believe the US is trying to make them use their US dollar reserves up.
But I'm reminded of the old saying "if you owe the bank $100, that's your problem. If you owe the bank a million dollars (or 2.2B) that's the bank's problem."
Oh indeed. The US is actively trying to get them into default. Of course the EU is trying too via sanctions.
No attempt to hide it.
It would go much easier and faster if Europe just stopped buying energy.
But I still maintain that a default won't hurt Russia anywhere near as much as it hurts those who lent them the money.
Like everything else, there’s only so long you can pretend.
https://tradingeconomics.com/russia/government-bond-yield
Wait. What are you saying here, that Russia doesn’t need access to capital markets or that capital markets will ignore default?
Well, that is true of the stop buying energy approach too. Probably hurt some in the west more than Putin.
I am somewhat of a moderate on the sanctioning scenario. I am not one who believes that you are going to just turn Russia into a roadkill. They have lots of hidden financial reserves and full team of chinese buddies and the like that will keep them from going down for the eight count. And the default thing is actually on a continuum. It is not either/or. They can default but still do workarounds and put packages together to satisfy the current creditors so that they do not get hurt that bad and Russia can argue that they did not outright stiff them. But it kills their creditworthiness and business climate.
But I do believe that all of the sanctions and treating them as a pariah will keep their economy functioning but at a lower level. And with brain drain etc it takes a toll longer term. So, again, I am not a believer that anyone will end out with the satisfaction of seeing them turned into a roadkill- but Vlad wants to go back to the Soviet Union and I do believe he will get a chance to go back to the Soviet level economy. Hope that works out for him and the Russian people. He is already babbling on about how capitalism is not the way to go long term, and about seizing any property of companies, and how central planning to mee the needs of the people is groovy. Deja vu all over again.
Capital markets won't ignore a default, but they won't starve Russia for the rest of its existance, either. Especially if they know the default was engineered and had nothing to do with the outright economic health of the country in question.
How many times has Argentina defaulted, again? Why do creditors rush back to lending to them?
Similarly, creditors will leap as soon as the war is over no matter what Russia defaulted on because of a non-access to funds locked away. Because they know Russia has raw materials and energy, and they can make a buck off it.