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Russia, Facing Big Budget Gap, Warms To Foreign Investors

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http://www.nytimes.com/2011/01/25/business/global/25rusecon.html?_r=1&ref=business

A few years ago, Vladimir V. Putin, as president, compared the energy riches of Siberia to a piece of candy held tightly by Russia, as if in a “sweaty fist.” However much investors might want it, it was off limits.

Yet just last month, Mr. Putin, now prime minister, said Russian officials “understand that we need foreign investment.” And if the current president, Dmitri A. Medvedev, continues with his plan to attend the World Economic Forum in Davos, Switzerland, this week — despite Monday’s airport bombing in Moscow — he, too, will be trying to attract foreign capital.

What has changed, to turn the sweaty fist into the open hand? Simply put, Russia needs the money.

Windfall profits from oil exports, which Russia had salted away before the global recession to cover deficit spending, are about to run out. In fact, that portion of Russia’s sovereign wealth fund, the Reserve Fund, is down to $26 billion — not enough to cover even half of the projected 2011 budget deficit.

Thus, for the first time since the financial crisis of 1998, Russia will be compelled this year to turn to international banks and pension funds in the United States and Europe to maintain financing for everything from modernizing the military to paying high public sector wages.

The government is also lining up a fresh batch of asset sales. It has retained Bank of America Merrill Lynch as an adviser for the planned sale of a stake in the state bank VTB. Shares in oil companies, hydroelectric dams and shipping lines will also go on the market.

With so much state property scheduled for privatization, Goldman Sachs reinforced its Moscow office this month by moving the chief of investment banking in France, Jean Raby, to Russia. Mr. Raby will be co-director, along with Christopher Barter.

The world is run by idiots, so Russia has blown all it's money and now needs to issue debt to cover it's deficit.

Nice to see the parasites already in place to fleece the Russian people of billions in fees.

All good news for the worlds debt markets we have another entrant requiring funding from a a limited supply or rather unlimited supply of FED free funny QE money.

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The bankers moved into Russia, en masse, started mucking about at the onset of the fall of communism, ca late 1980's.

They then proceeded to install one of their own, the Russian Central Bank a few years later.

Anything and everything has been happening there since.

Russia has experienced the corruption of 300 years of banking in less than 20 years.

Hopefully somebody noble enough, and mean enough, will get enough sense out expose them, oust them and put them on public trial.

It's apparently happening in Iceland.

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The bankers moved into Russia, en masse, started mucking about at the onset of the fall of communism, ca late 1980's.

They then proceeded to install one of their own, the Russian Central Bank a few years later.

Anything and everything has been happening there since.

Russia has experienced the corruption of 300 years of banking in less than 20 years.

Hopefully somebody noble enough, and mean enough, will get enough sense out expose them, oust them and put them on public trial.

It's apparently happening in Iceland.

The devastation done to Russia by the Chicago school free-marketeers was a political disaster of the highest order. We *could* by now have seen NATO including Russia as a member, with functioning democracies circling the Northern Hemisphere; this would have given the West in general the security of Russia's resources.

Instead we managed to inflict wholesale wreckage on the economy and pave the way for a highly authoritarian Russia.

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Violent shift from strict state control capitalism to unrestrained free market capitalism, while the Soviet Union collapsed (taking away its good aspects along with the bad), does not a good mix make.

Yeltsin was a chronically drunk and utterly incompetent slob.

Putin is authoritarian, but his clamp down on the first oligarchs looting the former Soviet Union was ultimately him helping a group of other oligarchs.

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Looks like Vlad the Impaler failed to get enough support from his Islamic friends in Iran and his close friend in Venezuala to come up with an alternative to the $ then?

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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