|
PureBytes Links
Trading Reference Links
|
Some comments by Dennis, Felix and others have been made regarding
the attitude of the Russians holding the world for ransom and
American and Europaen tax payers throwing good money after bad money.
This is only true on the surface:
Since the end of the cold war it has been one of the first goals to
promote our western, liberal way of doing business. So all what has
happend has been happening because we thought our way of life should
be exported - I do not blame the Russians for this.
Secondly the west and the Russian government wanted that a class of
capitalists (oligarchs) emerges that has got a strong self interest
in keeping these states on the liberal free market course. The role
models were the early-century steel, train, car, coal barons of the
United States. And indeed we have succeeded there as well - these
oligarchs have been doing quite well and have even financed Mr.
Yeltsins last election - defeating the communists.
Finally we have had western funds going into these soviet states
already anticipating the riches of the future - the stockmarket
six-folded and the Russian government was able to borrow by issuing
treasury bills.
So what we are seeing now in Russia is a 20s style down-turn caused
by overspeculation and the subsequent bursting of the bubble. The
west has run into it's own trap - temporarily.
When the Russian government finally pulled the plug they could have
basically monetized their debts by simply printing money like all
states do when they are in trouble. Or they could have just
have devalued their currency like the United States did it when their
debts had piled up and they decided to take the money back from the
Japanese. The funny thing is that all these techniques are accepted
as good market behaviour.
Now the Russians have used ALL available methodes SIMULTANOUSLY. But
who wants to blame them ? Did the western banks think that they would
receive 40% interest without risk ? This is extremely foolish to
think.
If the pain gets too big then every state will move. Even the
American government took Bunker Hunt out of the game when he put his
silver squeeze on.
So what has happend in Russia is NORMAL - they did it just more
radically.
And this is exactly the attitude that the west should take and
why they should help them to get back on track without encouraging
another bubble.
The magic of the Russian recipy - as Yuri has pointed out -
is that they can propably achieve all this by themselves without any
external financial help. And they propably designed their exit this
way because the west did not step in before it happened as it was the
case with Asia.
There is no way of turning back the clock. Some speculators had to
learn some new tricks which makes them more risk averse because they
do not know which other ones might be still up the sleeve.
Gerrit
Gerrit Jacobsen
http://www.tickscape.com
|