Chapter 14 2. How Russia Was Calculated

Some people call this period of Putin's rise to power to rectify Russia the "Putin ZTE".And Putin himself must remember what he said when he came to power, "Russia's GDP dropped by almost 50% in the 1990s. This is probably the first time in the past two or three hundred years that Russia has truly faced the danger of becoming a second- or third-rate country in the world." In order to lead Russia out of the slump, what Putin needs is a practical and efficient economic development plan.So, what kind of development plan did the Russian government finally adopt, and what kind of fatal risks does this plan imply?

● They began to borrow money from international bank syndicates. ●I believe they are still laughing at the international banking syndicate in their hearts, you are so stupid. ●Even my level, Lang Xianping, can understand it. ●They planned a dual-track national strategic development plan. Russia's "Development and Reform Commission" is called the Ministry of Economic Development. What kind of plan did they make at that time?Readers, please listen clearly, they have planned a dual-track national strategic development plan-using high energy prices and low international funds to make Russia bigger and stronger.This development strategy sounds very attractive.Because energy prices have been rising in recent years, such as iron ore and oil prices, and what are the bulk commodities exported by Russia?That is oil, natural gas, chemical products, steel and so on.Therefore, as a result of the sharp rise in energy prices, Russia has misjudged the whole country, and the misjudgment is that the price rise is caused by the principle of supply and demand.

And I told readers earlier that the rise in international commodity prices is not determined by the relationship between supply and demand. I used rice as an example for analysis.These prices basically violate the principle of supply and demand, but are determined by the pricing power obtained by international financial speculators.Note that this is of great significance, because fluctuations in energy prices are not determined by the relationship between supply and demand, but are bubbles manipulated by international financial speculators.However, Russia misjudged this situation, thinking that it was the result of the development of the world economy, and the rise in demand led to an increase in energy prices.

The consequences of this misjudgment were very serious.Because Russia thinks so, the international financial speculators just took advantage of this loophole and prepared to take advantage of it.Because both the Russian government and Russian companies have misjudged, they believe that the price increase caused by the relationship between supply and demand, that is, the price increase caused by excessive demand.As a result, they continued to expand production of oil, gas, chemicals and steel.Continue to export in large quantities, and earn more and more money. By the end of 2008, Russia's accumulated foreign exchange was close to 600 billion US dollars.What has all this money been used for?Similar to our approach, we all went to buy US treasury bonds.However, due to the misjudgment of the enterprises and the government at the same time, they have infinitely good expectations for the future, and believe that if this situation continues, Russia will become stronger and stronger, because the price will continue to rise.So they hope to develop through this way of high energy prices.So they began to borrow money from international banking syndicates.Why borrow money from an international syndicate of banks?Because the interest rate in Russia is too high, and the capital cost of the international bank syndicate is very low.

Do you know how low the interest rate of the international banking group is around 2%.Why borrow money from an international syndicate of banks?Because the cost of capital in Russia is very high.In March 2008, how high do you think Russia's interest rates were?Let's compare the benchmark interest rate between Russia and the United States in December 2008. The benchmark interest rate in the United States was close to 0 at that time. Guess how high it is in Russia, it is 13%.If Russians buy a car at the end of 2008, the interest rate on car loans is 16%, so these big Russian companies do not want to borrow money from Russian banks at all because the interest rate is too high.The loan interest rate given to them by the international banking syndicate is about 2%. The lowest interest in the world is the inter-bank lending interest. These international banking syndicates lend to Russian companies a little more on this basis.Which banks are they?Mainly Goldman Sachs, Morgan Stanley, etc., and these international financial capitals, and Hu Zuliu is an economist at Goldman Sachs, do you understand what I mean?So why tell everyone that the words of people like Hu Zuliu, Gong Fangxiong, and Xie Guozhong only represent the position of their company, not a fair position, so they are also pawns of international financial speculators.What bank?There are also Commerzbank, Dresden Bank, Fortis Bank, HSBC, JPMorgan Chase, UBS, etc., all of which are big banks.These banking syndicates have lent large amounts of money to Russian companies at low interest rates of around 2%.

Readers are invited to look at this perfect dual-track development strategy. Energy prices continue to rise, Russian companies earn more and more, and then use low-interest loans from foreign bank syndicates to allow them to have more funds to grow bigger and stronger.So Russia's stock price jumped to an incredible peak at the end of 2007, reaching more than 2,000 points, which is equivalent to more than 6,000 points in our stock market. From 2000 to 2008, Russia's GDP increased by 70%.Industry grew by 75% and investment by 125%.These indicators put Russia back into the ranks of the world's top ten economies.At the same time, Russia's GDP in 2007 was equivalent to the 1990 indicator.This meant that Russia not only emerged from, but finally ended, the economic crisis of the 1990s.Dimitri, director of the US "Nixon Center for Peace and Freedom"?After a detailed study of Russia's developments in recent years, Symes noted that Russia is still "a bear" and that the United States must now start talking to Russia as a re-emerging great power, not "a country that needs more than it did in Yeltsin's time." understanding and patient sick power".Russia's rapid development has benefited from a policy of nationalizing most of the assets and earnings in the oil and gas industry, which has made Russia an energy superpower.However, Russia did not expect that at this moment, international financial speculators had dug a well-designed trap in the most unexpected place.

So, readers, pay attention, when an international syndicate of banks lends you money, they need collateral. Do you know what they require as collateral?Just use assets or this frothy stock as collateral.I believe these Russian companies still thought at that time.These international financial capitals are really stupid. They use such high-priced stocks as collateral, so these companies are very happy and happily give them their stocks as collateral.How did they know that they were all covered, how much money did they borrow from international financial capital in total?A total of 500 billion U.S. dollars has been borrowed, and Russia's foreign exchange is only 600 billion U.S. dollars.

Russian companies borrowed 500 billion dollars of low interest loans and basically used assets or stocks as collateral, because they thought the stock had appreciated in value, and using this as collateral, they thought they had taken advantage of it, and they even laughed in their hearts International banking consortium: You are so stupid, how can you use stocks with such a high price-earnings ratio as collateral? Aren't you afraid of risks? High energy prices and low capital costs have been Russia's development strategy for the past few years.As a result, they never dreamed that the price of oil would drop from $147 a barrel to below $35 a barrel.Please pay attention.What happened when the price of oil fell to $35 a barrel?That is, these large Russian companies, including Rosneft, Gazprom, Eurasia Group, etc., have all suffered losses.The stock index of the Russian stock market fell from more than 2,000 points to 500 points, and its decline was similar to that of our Chinese stock market, which fell by 70%.I suddenly discovered that at this very moment, the European and American banking syndicates demanded that Russian companies repay the money at the same time, and it was not only Russian oil, gas, steel and chemical companies that were involved.Even Russia's three major banks have borrowed money from international banking groups, including Russia's Agricultural Bank, Savings Bank, and Bank of Foreign Trade.Because of the low cost of interest, even they started to borrow money, and all the big banks and big companies in the whole country were involved in it.And at this moment, the international bank syndicate demanded the money back.

Think about it, how do you pay it back?It turns out that these companies have made a lot of money by relying on energy exports. Now that energy prices have fallen, everyone has lost money and can't afford it. What should they do?The stock is worthless, and you can't even sell the stock to repay the loan, just like Chinese stocks, which have fallen so much.From 2000 points to 500 points, it is worthless at all. Even if you sell your stocks, they will not be worth much. What will happen if you don’t pay them back?What about your collateral?All collateral was forfeited.In other words, the three major banks in Russia and the equity of large Russian companies are almost all controlled by these international financial capitals. Therefore, Russia has been busy for nothing in the past few years. Busy for the international financial capital, so busy that he finally handed over the equity to others.Well, think about it, how dangerous it is to come to this point, even my Lang Xianping level can understand it, Putin is much smarter than me, he will not fail to understand it.

Therefore, Putin came up with a plan to start bailing out these companies, hoping to redeem their shares.So I started thinking, and following the train of thought of international financial speculators, I calculated an account to see how much money Russia could spend to redeem the shares.Because I was thinking, if international financial speculators intend to plot against Russia, they must have carefully planned every step of the way, do you believe it or not.The kind of practice that makes you redeem it even if you can't get it back is called a master, otherwise, would you still be a master if you redeem it?