For 15 years, the one leader of all of Russia, President Putin, has failed to diversify the Petro single basis economy. The Russia GNP was staggering down ward in all 15 of Putin years. The lifestyle of the average Russia is under pressure from rising taxation to pay the enormity of debt the Russian nation is accumulating. Russia cannot afford in its super crash of GNP revenues over 15 years of down graph:
- Its social services
- Its health care
- Its pensions
- It transportation systems
- Its space program
- Its defense industry
- Its government and its debts
Russia debt is more unsustainable than Greece. As with so many nations where politics runs economics and economics has failed to run politics the way things work, is debt, offsets the fact that the nation spends more every year than it earns.
As the debt becomes mount Everest what happens?
You begin to SEE what happens in the RUBLE the Russian currency. What IS going to happen is that the tools of CURRENCY MANIPULATION – trade war – currency state intervention, will fail. Humpty Putin Dumpty now empty and all his men and all his horses will fail to put the Ruble back together again.
A massive RUN on the RUBLE is coming. This is WHEN not IF. Why?
Putin has placed the debt of the nation at a critical period (now) due to prior military gambles – into a state of zero sum game. The plunge of oil prices has now lost the MARKET SHARE WARS for Russia. As America takes customers away from Russia and other non-OPEC producers take ever greater MARKET SHARE away from Russia think about the economics this way:
- Russia has plunging oil prices from $ 150.00 dollars US a barrel to near $ 39.00 a barrel in 2017 or a three-year plunge of almost 70%.
- During this period, Russia cuts back supply with Opec and others take their MARKET SHARE AWAY FROM THEM – they can never not ever get these customers BACK.
- The Ruble based on oil revenue paying state bills is now a currency that is in free fall without a basis of value. Russia must default and will not be able to pay its bills.
- Russia spending is rising.
- Russia income is in free fall downward.
Default is the outcome as the debt mountain has become too massive to work out of or maintain by income. The market place has real Intelligence. False News will not propel Ruble management. The Russian phony currency manipulated by communist insane gang members for their own elite wealth, has run its course as such runs historically do. The outcome for the Russian People is massive and painful.
The Russian Economy will experience a flight of capital greater they have known in modern history.
Their currency will inflate to be worthless and collapse.
The economy will move into depression as financial institutions go bankrupt.
This is always the outcome of communist economics. This is true I Venezuela today, Cuba soon enough, it is true for Argentina, Brazil, and other social models that spend more than they make and pay their way forward with debt. America will follow suit if politicians do not change the failed model. The model is a worldwide failure on economics. Eventually the worst abusers like Russia bring the system down, or China or Italy in the EU. It is just a debt bomb about to create worldwide contagion.
These math models cannot be false newsed away. This is antithetic and financial history. Folks. Read the tea leaves.
Natural disasters in Russia – they can no longer afford billions to make that right for their community without more debt. Their debt rankings are being downgraded to junk making the Russian cost to refinance their debts on one two and five to ten year bonds SOARING in cost – they have a BAD DEBT INCOME TRAP.
A trillion in bad debt that is now non-performing and not asset to value ratio on Russian financial institution books, but is pure crap yet to be adjusted to crap status – is known to the IMF the WORLD BANK and the market. Everyone wants to avoid default because a Russian default sends the nation to WAR as what other option is left? Revolution internally? What?
The Russian PEOPLE reside in a sea of false news designed to keep them patriotically focused on false threats to assure their nationalism blinds them to the internal truth. Putin and his team has failed to diversify the economics to an income over spending ratio which 15 years later has RUSSIA bankrupt, while Putin and his gang of thieves are personally now among the wealthiest people on earth. How the Russian People will manage this inconvenient truth when the facts come forth and the false news is total lies – is unknown today – although anti Putin protests are rising despite the crack down to place the leadership that display the truth, in prisons.
The Ruble as a currency is now toast.
Desperate moves to hold off the inevitable crash of the Russian currency will fail. In fact, the panic at the top as Putin has only WAR LEFT and WAR drains the economy even more. There is no way out of this abuse where 99% of all Russian wealth is owned by 1% of elites – as the circulation and income to debt ratio can no longer be supported. The rubber band is breaking and the outcome is massive implosion of the Russian economic system so long abused. Historically this model of Politicians fiddling while Rome burns is as old as Nero speaking economically. Humans who are insane but in power destroy nations. Sanity builds nations. IT really in the end is arithmetic. School children get the math modeling.
Those who fail to bet on the right side related to the Russia Implosion are going to be wiped out and soon. The market has the dial up number here. What comes next includes:
- Super Shorts on Russian ETF’s.
- Super Shorts on the Ruble.
- Super Shorts on Russia commodities and asset classes.
- A run-on investment capital out of Russia and its trading effected partners.
- Super Shorts on institutions effected.
There is no escape from 440 trillion dollars betting on the right side of this and the billions trying to stop the run is like trying to stop Nigeria falls as an economic water flow, at standing at the bottom of the massive water flows naked with a rubber maid bucket. Good Luck Putin on that agenda.
Failed policy over 15 years with failed policy before compounds economically. The Russian nation is an upside debt bomb with a worthless economic in a worthless commodity, oil, moving into the 30’s after a possible bump from speculation largely RUSSIA SOVERIEGN WEALTH FUNDS – that will lose enormous money as the bump turns to crap and oil tanks again. As we have predicted precisely RIGHT all year in 2017 – such that our readers acting have made fortunes shorting oil as we advised. Fortunes. But not Russia.
Wrong side of the bet.
Russian losers do not lose well. As the end becomes so clear Putin has problems of survival in the Russian system over such loss and failure – is death till we part.
So, Putin’s bet on energy and alliance partners included Saudi Arabia. The alliance pits Putin against his alliance partner Iran. The wild card is if Putin acts from Syria to topple Saudi for Iran in a massive Iran war in which Saudi oil folds into Iran which becomes the single largest oil lake on earth – game changer. The wild card.
Will the United States Go to War over Saudi the seat of all terror – with Iran – at what cost and to what gain – when the war is RUSSIA and the USA? Putin is a betting man we’ll see as that is his one and his only near term option as default looms, debt bomb’s will explode in Russia and the currency is toast.
So, the contagion economics breeding SUPER CRASH remains: Debt driven defaults from:
- EU nations
- India and Pakistan
- Saudi and Iran
The United States of America with 1.9% growth which itself is a lie number is so pathetic against our debt and trade imbalances have so limited a maneuvering room ourselves. The US Congress fiddles in this crises market while America economics are burning down.
I see the World Markets Super Crashing 60% in all asset classes with deflation running a global depression for 25 years and only war resets the trade balances. Sad but no one is cooperating to work out a sane solution.
The insane are in power.
Berny Dohrmann – Keeping sanity and truth on for my tribe of readers. Spread the word.