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Gerrit,
US$40.00 billion was sent this few weeks by World Bank to Russia,
but was credited to the mutlinational banks,it was said just to give
more money ending in the Russian Mafia's pocket, the money never left
America because they were credited to the acounts of the Mafia in US
banks. So Russia is just an endless hole to cover up. Their problems are
so big , the current level of monetary aid is just a drop of the bucket.
Thankfully the world has the ultimate creditor, the American taxpayer.
.
Can't imagine why Russia has so much foreign loans through these
years.(post Gorbachev), Aren't their purchases mostly (importations)
just food and grains whose value is should be just comparable to their
arms exports. Since they export also lots of oil and preciuous metals
(before, as prices were not as bad as these days) and not very much
importation luxury items,motor vehicles or industrial machinery. Also a
lot of foreign investments from West Germany and others in the private
sector specially in the oil drilling sector, so where did all those
hundreds of billions foreign aid , loans and invetsments go the last ten
years?
Are they all just payments and ransom for nuclear weapons threat ? Then
the whole world is a hostage right now, huh?
Gerrit Jacobsen wrote:
>
>
> However the Russians have chosen to play the game with their own
> rules:
>
> The Russian government had kept their currency stable and borrowed
> mainly heavily in RUSSIAN ROUBLES (and not in Dollars). The
> investment banks and hedge funds bought these treasury bills (GKOs)
> then hedged this Rouble exposure with Rouble/Dollar forward
> contracts - which they settled with Russian banks. The Russian
> Rouble debts ballooned over the last year and interest rates went up.
> However the hedge funds and the investment banks felt that the high
> interest rates and the currency hedge would give them a limited
> downside if things should turn ugly.
>
> What the investors did not think about was that the Russians could
> invent a new approach to solve their problems:
>
> 1. They just refused to pay their treasury bills and replaced them
> with fresh discounted debt.
> 2. they devalued their currrency
> 3. they forbid their banks to honor the forward contracts.
>
> With these three measures they blocked all possible escape routes
> that the investors could have had and basically cheated the
> international investors out of several billions of dollars.
>
> This experience is news to many bankers and they haven't digested it
> fully. In any case it has made them extremely risk aware.
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