Sunday, April 19, 2015

US Media Silent Now About Russian Finances

A few months ago, the media stepped in to push the Russian financial collapse idea along with the orchestrated attack by big finance. They have been relatively silent on stabilization of the ruble and now its rally. I stand corrected, The Economist writes that the rally is "Unfair". They generally must stay silent because discussing what and how things happened would boost moves by "their" experts versus our experts who watch a crash and yell "whoocoodanode". Part of avoiding the actions is to hide that our elite could do the same but do not in moments of crisis. To give attention now would also set up a tricky situation coming up later this spring. Our media's job is not to inform but to entertain and persuade support for the machinations of our progressive elite.

Fun was reading Western sources write that aw shucks the Russkis won't be able to save their currency, and then see the ruble stabilize and now recover due to actions taken by the Russians. That Forbes writer talked of a desperate 150 basis point move, and had no clue that a central banker in 2014 would move rates up from 10% to 17%. Oh my God, a central banker who acts like days of yore. Russia's central bank head is a woman like Janet Yellen but much younger and on a mission to protect the ruble. The Chinese did help the Russians out, but the success to their moves were facing down speculators. The FED's mission is not to protect the dollar. The FED could pop bubbles before they become large and disastrous, but they do not. The "measured" interest rate hikes through the years by both Greenspan and Bernanke were to keep the debt expansion going for as long as possible and allow for more marginal borrowers to get pulled into the system. Sharper rate hikes at good moments in the mid-'00s might have prevented top of the bubble speculation and made the collateral damage not as horrendous. That is not our style though, as we just clean up after the bubble pops and the middlemen collect their fees. It was not always the case as we did rate hikes like that in the early '80s.

The ruble's recovery is based on many different factors. Oil's stabilization helped, but their central bank held firm in the face of the attack. The recovery might continue and even pick up steam as the spring rolls on. Why? The sanctions on Russia expire in June. They cannot be extended without Greece's vote. This makes those meetings between the Greeks and Russians make more sense now as besides some cash for the Greeks, the Greeks actually have something to offer the Russians besides Spring Break destinations. The entire euro experiment hits weird snags as sanctions, the euro, debt and a whole host of related items come to a head. The Greeks could take bailout money, but veto the sanctions if the deal if less than they need and the Russians can supplement. Shhh, but the Russians are already dangling 5 billion euros to Greece in exchange for a gas pipeline. Anyone look at who picks up most of that Greek debt? The EFSF owns over 60%, and individual nations like Spain and Italy own, roughly, a combined $60 billion. Think Italy and Spain can handle that hair cut? How much could Russia supplement? How fast does Greece veto those sanctions? How much does the ruble recover afterwards?

The media can report on the event. It will go into hysterics for Greek default monthly (we've witnessed this for years), and it can go into rage if the Greeks help the Russians for one moment. Will we get an analysis of whether those sanctions were justifiable? Probably not, as that would create a curiosity about why or when exactly did everything start in Ukraine? Why does no one place sanctions on us? Wait, we're the global empire? Hold on, how can that be, the US is the underdog helping the little guy find freedom!?!?!??! Russia is no angel, but Americans cannot have that conversation about the ethics of the empire. The regime cannot have plebs evaluating the ethics of policies in the name of progressivism. They may start to question the ethics of domestic policies. Forget ethics, we cannot talk about how Russia weathered a financial panic, and what they did that our policymakers are so afraid to do.

12 comments:

Alexandros HoMegas said...

"The Economist writes that the rally is "Unfair"."

Unfair... What is really happening in this world?

Anonymous said...

Russia has broken free. The West hit them with sanctions and massive PR attacks amid an oil price collapse. And they are doing just fine.

Russia has no more reason to fear.
(1) The oil collapse really hit hard out of left field. That isn't likely to be repeated.
(2) In the future Russia is less likely to tie itself to western finance. The west has proven unreliable and other partners are available.

Good for them.

Meanwhile they have been a class act generally speaking, never cutting of anyone's gas during winter even the face of ostracism and nonpayment, steadly leading International Space Station efforts when others would have taken their ball and gone home.

Dan said...

My favorite:


"Russia is so screwed"

http://www.slate.com/blogs/moneybox/2014/12/16/russian_currency_crisis_putin_has_no_good_solutions.html

The whole thing is oozing with glee that the Russians will suffer.

(Byline says, 'Jordan Weissmann is Slate's senior business and economics correspondent.')

I count Russia as an ally (the enemy of my enemy is my friend, heh).

Anonymous said...

The hate toward Russia and the push for regime change Is like the early 20th century when Wall Street and London bankers financed Lenin, Trostky and other jewish commies to destroy Christianiy.

Dan said...

"The hate toward Russia and the push for regime change Is like the early 20th century when Wall Street and London bankers financed Lenin, Trostky and other jewish commies to destroy Christianiy."

Huh? If that's true I have never heard it. Links?

Son of Brock Landers said...

Dan, I posted this book a year ago. Details the funding.
http://reformed-theology.org/html/books/bolshevik_revolution/

Portlander said...

Yeah, I called that one. Hindsight is 20-20, but d*mn I wish I would have tried harder to buy rubles back when the world was ending.

That one never made any sense. I would not be surprised if it was Soros playing those light-weights in the Obama administration. Convince them they could take down Russia via the ruble, then after they'd blown all their dry-powder, he was there ready and waiting to take the other side of the trade. In fact, I'd me more surprised if he wasn't behind it in some form or fashion. I expect that Janus Buffett got in on the trade too.

sykes.1 said...

The growing Russian-Chinese alliance is the real big story, and the success of the Asian Infrastructure Investment Bank is a major defeat for the US. Power is shifting strongly away from the US and its allies.

The Mainstream Media also seemed to have missed the fact the US foreign policy has been reduced to sheer vandalism, destruction and death for the pleasure of destroying and killing. Sudan, Somalia, Niger, Chad, Nigeria, Congo, Libya, Egypt, Iraq, Syria, Yemen … One unmitigated disaster after another.

And now we have a battalion of the 173rd Airborne Brigade in western Ukraine and advisors and mercenaries actually fighting alongside the Ukrainian troops in the east. Poking the Russian bear is called reset. How much fun can we have there?

peterike said...

Interesting how the head of Russia's central bank, Elvira Nabiullina, is a graduate of Yale.

Now mind you, I like the Russians and think we are behaving abominably toward them, but certainly from the majority point of view they would be considered enemies, or at least rivals. And yet here is one of their people taking up a valuable seat at Yale University, only to go back to Russia and work against us.

And Russians are a fraction of this compared to Chinese, Indians, Arabs, African potentates and whoever else. What other nation in history would willingly -- indeed, eagerly -- give up thousands of its most valuable assets -- seats in elite universities -- to other nations, most of whom are rivals for wealth and power?

Well, perhaps now that a dreaded, vilified Russian is using her Yale education to fight back at American/Jewish power, the powers that be might wake up a little to what they're doing.

Nah!

Portlander said...

Peterike,

While I agree with your point today, Nabiullina is ~52 years old. 30 years ago it was a reasonable action.

Today the problem is not the education per-se, it's the bifurcation of career paths that the credential provides. Those with the Ivy credential not only want more power for themselves but since the economic pie is obviously shrinking are taking pains to ensure their piece increases at the expense of everyone else's. Fewer Americas in the seats at the Ivy's means fewer Americans with which to compete to get their children's hands on the lever.

Toddy Cat said...

"And now we have a battalion of the 173rd Airborne Brigade in western Ukraine and advisors and mercenaries actually fighting alongside the Ukrainian troops in the east."

I've lived over half a century, and this is without doubt the stupidest and most dangerous foreign policy adventure I've ever seen. Washington has actually gone mad.

Mark Citadel said...

You could tell this was coming. They were also pushing the "Ukrainian military is kicking butt" lie before they got surrounded at Debaltseve. Then they just stopped covering the conflict altogether.