Russia is one of the biggest FOREX holders on earth after the Chinese and Japanese. The US has seven trillion in IOUs held overseas due to the biggest trade deficit in the history of humanity. The US tried desperately to destroy Russia’s banking system this year. But it was, as I accurately predicted, a laughing failure. Instead, the mess caused the euro to nearly collapse.
Some Asian (Chinese) credit rating groups place Russia’s ratings at an A and the US an A-. The US considers Russia’s rating to be junk status. The Chinese are very kind to keep our rating above junk status…for the time being.
As I pointed out in my critique, the credit downgrades were totally unjustified since there was absolutely no chance either that the Russian government would default on its sovereign debt or that Russian corporates would default on their corporate debt .
So it has proved. At a conference in St. Petersburg, Putin has said that Russian corporates repaid $130 billion of foreign debt last year and have now paid off the bulk of the $60 billion of foreign debt that is due for repayment this year.
Though the dollar value of the Russian Central Bank’s reserves has fallen from $388 billion, when I wrote my critique, to around $355 billion now, it seems most of this fall has been caused by the depreciation of the euro.
The gross abuse of the credit ratings system isn’t new. The lies told about the credit worthiness of EU and US banks before they suddenly collapsed, is an earlier example of lying about money matters. I warned back in 2003 that US and EU banks were all grossly undercapitalized. They retorted saying that little capital was needed because of their wonderful DERIVATIVES games they played.
Derivative games are not dead. They were continued via the central banks handing out money like candy causing lots of inflation. One of the things to inflate was gas and oil. Russia got rich.
To fix this, the EU and US persuaded the new delusional king of Saudi Arabia to flood world markets with oil and thus, create a crash. He did and SA took a bloody bath and now has uprisings both in the family: Saudi king removes his half-brother as crown prince and replaces him with counterterrorism czar following arrest of 93 suspected ISIS members and externally.
In a desperate attempt to gain power, the new king handed out money to the masses when he took over. so the finances of the kingdom teeter on the edge of insolvency.
Also in the news, from freaked out Kiev: Forest fires heading for Chernobyl nuclear plant – Ukraine Interior Ministry. Massive amounts of radiation trapped in dead trees that litter the place will burn and move upwind to the rest of Europe. So much for ‘global warming is going to kill us.’ The Germans, in particular, will be hammered by this.
Turning the oceans ‘white’ will NOT stop sea ice from melting some global warmist scientists claim. There are many insane plans for making the planet much colder. Since it is already cooling down rapidly, these plans will succeed even if none of them are actually launched. Europe will have to cope with no more cheap Russian energy in the near future since the rulers seem bent on screwing up this whole thing.
The attempt at having an EU/US court declare Gasprom to be illegal is a big fat match to light to the bonfires of Chernobyl’s forests.
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