Pretty Putinesque, if you ask me. At least he is cutting in Russia's flesh as well as long as he continues to wound weak Ukraine. The impact on the European economy as a whole is so far obviously very limited. A giant, even if weakened, doesn't feel much if a weakling kicks a nearby dwarf.Originally Posted by kaur
Investors' Fear Crimps Russian Borrowing
So far the balance sheet looks still fairly strong but the Russian fires of war are buring Russian capital and growth. It is still early days, early weeks. We will see how much the Russian economy will suffer.Usually prolific borrowers on global markets, Russian companies are finding their funding lifeblood cut off by banks and asset managers who fear their investments will get caught up in the standoff between Moscow and the West.
With military tensions running high between Russia and Ukraine and a looming threat of tough Western economic sanctions, it is getting harder for companies to issue bonds or obtain loans — a situation that could eventually threaten some of them with default.
BTW: Crimea Makes Economic Crisis Worse
Personally it seems that most of the silly threats haven't been enforced. Most likely because some of the smarter guys have been able to make their case that those threats were, well, silly. But while almost all the silly stuff hasn't materialized not much has been done to help the Russian economy.Instead, it seems that authorities are competing with each other to see who can do the most harm to the economy. One top Russian official proposed selling off the country's dollar and euro reserves without explaining how they would be replaced. Perhaps he would prefer the yen and yuan. But a quick look at the currencies preferred by the central banks of other countries is enough to show that they are far less reliable. Maybe he feels Russia should keep its money in gold.
For every difficult and complex situation, leaders should respond with better and more responsible economic policy — and not just make matters worse.
Bookmarks