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Russia Is Doomed

Discussion in 'The Americas' started by Averageamerican, Nov 14, 2014.

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  1. INDIAN NATIONALIST

    INDIAN NATIONALIST Major SENIOR MEMBER

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    time to start making babies, russia
     
  2. Averageamerican

    Averageamerican Colonel ELITE MEMBER

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    Putin Just Announced A Massive Foreign Currency Bailout For Russia's Collapsing Banks
    [​IMG]
    • Dec. 4, 2014, 10:07 AM
    [​IMG]Ilya Naymushin/Reuters/Amanda Macias/Business InsiderAn artwork depicting a portrait of Russian President Vladimir Putin based on a layer of US dollars and Russian roubles.
    In his annual address to the nation on Thursday, Russian President Vladimir Putin announced that the country's reserve funds, usually earmarked for investment in state projects, should be used to bail out troubled Russian banks. In doing so he revealed just how grim the prospects for financial institutions have become following the rouble's collapse. The Russian private sector appears to be on state-funded life support.
    In particular, the move strongly suggests that the Russian banking system has been running out of collateral that can be used to get dollars from the central bank. Access to dollars is critical because the banks took out foreign-currency loans from investors that they have to pay back in the same currency. Current estimates suggest Russian businesses need to repay $35 billion this month.
    But Russian banks face major challenges funding this, with Western sanctions freezing them out of global capital markets on the one hand and a weakening domestic economy putting pressure on profits on the other. These issues have been compounded by a fall of about 40% in the value of the rouble since June. As the rouble loses ground to foreign currency, those debts become increasingly difficult to pay back.
    Usually it is the job of the central bank to provide emergency funding for a country's financial institutions. In Russia this is typically done through what are known as "currency repo auctions," in which banks offer collateral (like high-quality bonds) in exchange for access to currency, especially dollars, that they need to meet foreign-currency obligations.
    However, this facility has seen limited use by Russian banks despite the rouble falls. The central bank had tried to explain this by saying low demand was a consequence of there being plenty of dollar liquidity in the financial system.
    Putin's statement that the country's reserve funds should be used instead to back its banks strongly suggests that this claim was wrong. There was not a lack of demand — rather, the banks' collateral was insufficient to get dollars in exchange.
    On Thursday the Russian central bank cut the foreign exchange repo rate, the interest rate it charges on the currency it gives to banks. The rate fell from 1.5% above the London Interbank Offered Rate (Libor) — the benchmark interest rate at which banks lend to one another — to 0.5% above Libor. A lower interest rate should make it less expensive for banks to borrow from the central bank and therefore more appealing.
    The rate cut illustrates that the central bank is growing concerned about the ability of Russian banks to meet their debt repayments. If they fail to pay, it could trigger a wave of defaults that would further hit the fragile Russian economy, which is already expected to fall into a recession in 2015.
    Yet if the problem is a shortage of collateral, these measures are unlikely to be enough. Back in February, JPMorgan analysts warned of just such a scenario: about 60% of available collateral was already pledged of an upper limit of about 75%. That top level is the point at which JPM says the stress in the banking system, in the form of increased risk of default, may start rising rapidly.
    We appear to be near that point.
    Judging by Thursday's news, banks appear to have been forced instead to seek help from the state.
    This would explain Putin's move to divert money usually earmarked for infrastructure investment (for example, in Russia's ageing road and rail network) into a bank bailout. Here's the passage from his speech:
    [​IMG]Kremlin
    Reuters reports that VTB and Gazprombank have already applied for 250 billion roubles ($4.7 billion) and up to 100 billion roubles in additional support. This would put a further dent in Russia's reserves after the country saw total international reserves drop some $90 billion so far in 2014, mostly in failed attempts to buoy the rouble.
    It might also open the door for non-bank companies to lobby for additional support. The oil company Rosneft requested 2 trillion roubles last month but was turned down.


    Read more: http://www.businessinsider.com/putin-russia-emergency-funds-bank-bailout-dollar-2014-12#ixzz3L1oI4YYK
     
  3. brahmos_ii

    brahmos_ii Major SENIOR MEMBER

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    During recent great depression(2007 to 2012) what happen to banks in USA, its nothing new in this world, its cycle of growth....
     
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  4. HMS Astute

    HMS Astute BANNED BANNED

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    The collapse of the Russian rouble :

    [​IMG]

    USD exchange rate in roubles according to the Central Bank of Russia:

    10 January 2014 - 33,15
    24 January 2014 - 34,03
    31 January 2014 - 35,24
    28 February 2014 - 36,05
    2 September 2014 - 37,29
    17 September 2014 - 38,71
    30 September 2014 - 39,39
    13 October 2014 - 40,21
    20 October 2014 - 41,04
    29 October 2014 - 42,39
    31 October 2014 - 43,39
    6 November 2014 - 44,40
    7 November 2014 - 45,19
    8 November 2014 - 47,87
    29 November 2014 - 49,32
    1 December 2014 - 51,81 [​IMG]

    Банк России
     
  5. Averageamerican

    Averageamerican Colonel ELITE MEMBER

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    Russia: The Putin Paradox

    November 20, 2014: In eastern Ukraine over 200 people have been killed in Donbas since the September ceasefire. Over 4,000 have died there since Russia began military operations (via pro-Russian rebels or Russian soldiers) in April. Russia was warned by the West that if the pro-Russian rebels held their election on November 2nd (to establish a separate state) and Russia recognized it, this would be a violation of international law and would bring more sanctions. Russia used the same tactics to annex Crimea from Ukraine earlier this year and parts of Georgia in 2008. Russia blames the United States for all the anti-Russian attitudes among its neighbors. President Putin and many Russians see America as continuing the Cold War by conspiring to weaken Russia. Many Russians, however, note that their neighbors don’t agree and see Russia returning to its traditional paranoid attitudes about all foreigners. These Russians realize that there are bad habits in Russia (aside from tolerance for corruption and outlaw behavior) that need to be changed before Russia can move forward. But at the moment the traditionalists are in charge and it’s paranoia as usual. The average Russian feels the impact of all this with shortages and high inflation, all brought on by the sanctions and the plunging price of oil. An obvious sign of this is the value of the ruble against Western currencies. So far this year the ruble has lost 30 percent of its value versus those currencies, making most imported goods noticeably more expensive. Russians are less able to afford overseas vacations and those that do go find that Russians are not as welcome as they used to be. Russian airlines are seeing foreign traffic decline as foreign passengers switching to non-Russian airlines when travelling into and out of Russia.

    The Donbas rebels demand independence for the five million people in Donbas areas that the rebels control. The Ukraine government refuses to accept that but is willing to negotiate some autonomy. Most Ukrainians, and many Russians believe the Russian government wants to annex Donbas and nothing less will do. Russia quickly discovered that seizing Donbas was going to be a lot more difficult than anticipated. Part of the problem was the unexpectedly robust resistance by Ukrainian forces. There’s a lot more popular support in Ukraine for resisting the Russian aggression than there is inside Russia for keeping it up. In fact most of the eight million ethnic Russians in Ukraine are hostile to the Russian aggression and Russia has managed to unite Ukrainians like nothing else before. The Ukrainian anger towards Russia is real and Putin has reason to be worried about it.

    President Putin recently told the new American ambassador that the United States should not interfere in Russian affairs. This warning covers a lot of issues, including things like Russian neighbors joining NATO or American cultural influences in Russia. Putin has considerable popular support for his demands on America and the West. Most Russians back rebuilding the old Russian (first Czarist then Soviet) empire. There are similar levels of support for keeping foreign influences out of Russia. This includes such standbys as Roman Catholics, new religions in general and concepts like true democracy. It is unclear if Putin accepts, or even acknowledges that the demographic support for these ideas is against him. That is, younger Russians are not enthusiastic about a new Russian empire (they realize that the empire was always expensive and a lot of trouble) or hostile to foreign influences (which have benefitted Russia, when they managed to get in). But all politics is local and in this time (early 21st century) and this place (Russia) Putin is backing ideas that make him a very popular politician to the people who matter to him most (the majority). Russia may be turning back into a dictatorship, but a certain amount of democracy has already infected Russian culture and can be eliminated only with great difficulty. Russians have also become accustomed to a level of prosperity not seen in Russia for over a century. Putin is already taking heat for how the Western sanctions are threatening the Russian economy. This is Putin’s major vulnerability, that and Russian aversion to another major war. The specter of World War II still lies heavily on Russians. More than any other nation, Russia suffered the most from that conflict, with 18 percent of all Soviets being killed and the economy crippled. It will take another generation or two for that trauma to recede. For the moment any Russian leader who tries to drag the country into another major war will see their approval ratings plummet and popular support evaporate. Putin is playing a dangerous game, more for himself and Russia than for the rest of the world. That’s because Russia counts for much more than when it was an empire. And that’s a memory that will only fade with time.
    The Ukrainian aggression is costing Russia more than money, it is also severely damaging political and personal relationships built up with great effort after the Cold War ended. With the loss of those personal connections Russia is throwing away easy access to economic opportunities and diplomatic support. Russia is feeling the economic cost now, and if China turns hostile (which it eventually will), Russia will have few allies to rely on. Even India, long a reliable friend, is backing away. That leaves Russia with Iran, Syria, North Korea, Cuba and several other international outcasts to depend on.
    A new team of hackers has been identified. This one has been concentrating on finding and taking political, diplomatic and military data from NATO nations involved in opposing Russian aggression in Ukraine. This group, called APT28, was identified as Russian by numerous patterns in their code (some of which is left behind or otherwise captured) that made it clear that the creators were Russian speakers, were working somewhere in the same time zone as Moscow and using software techniques known to come from Russia (hacker tools that are for sale on the black market). Moreover the data being sought would mainly benefit the Russian government. This sort of attack is showing up with increasing frequency and accuracy.
    November 18, 2014: NATO accused Russia of building up its military forces inside eastern Ukraine and along the Ukrainian border. As evidence NATO pointed to social media where Russian soldiers and Ukrainian rebels still post photos of themselves inside Ukraine handling new Russian (not Cold War era Ukrainian stuff) weapons and equipment. NATO also has satellite photos as well as many taken on the ground by Ukrainian forces. Russia denies everything. NATO also criticized Russia for increasing the frequency of its warplanes and warships moving close to the borders of NATO countries, particularly those bordering the Baltic and North seas (Britain, Norway, Germany, Poland, Latvia, Lithuania and Estonia).
    November 17, 2014: President Putin announced that under no circumstances would Russia allow pro-Russian rebels in eastern Ukraine (Donbas) to be defeated. Putin also accused Ukraine of threatening a major war with Russia over the issue.
    Russia responded to expulsion of some of its diplomats from Poland and Germany for espionage by expelling some Polish and German diplomats from Russia and denying any Russian espionage activity abroad.
    November 16, 2014: In eastern Ukraine (Donbas) rebels again attacked Ukrainian forces defending the Donetsk airport resulting in 23 rebels and nine Ukrainians killed.
    November 15, 2014: Ukraine ordered government employees out of parts of eastern Ukraine controlled by the rebels. That’s because Ukraine is cutting government services to rebels controlled areas and the several million people in those areas.
     
  6. Averageamerican

    Averageamerican Colonel ELITE MEMBER

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    November 14, 2014: Russia and Abkhazia have agreed to unite their armed forces. In other words, Abkhazian forces would become part of the Russian military. Over the next few days tens of thousands of Georgians held anti-Russia demonstrations over this, some of them featuring condemnations of Russian aggression in Ukraine. After the 2008 Georgia invasion Russia took over border security in South Ossetia (population 50,000) and Abkhazia (population 200,000), two areas formerly part of Georgia. In 2009, these two ethnic separatist areas declared themselves independent, but they have actually become part of Russia. Georgia has a population of 4.6 million, and a hostile relationship (going back centuries) with Russia. In 2009 Russia took over border security in South Ossetia and Abkhazia. Now Georgia has to live with the fact that Russia annexed six percent of its population and territory and no one can do anything about it. This annoys the UN but Russia pays no attention to any criticism of its actions down there. Russia has, in effect, taken two provinces from neighboring Georgia, and gotten away with it.
    November 13, 2014: Russia agreed to sell Mi-35 helicopters to Pakistan. This move angers India, which is becoming increasingly estranged from Russia for a growing list of reasons.
    November 12, 2014: The government announced that maritime recon aircraft would soon patrol more distant areas (like the Gulf of Mexico) on a regular basis. This is all theater, but the Russians do have an opportunity to collect small amounts of useful information this way, although at great expense. Back in 2009 there were discussions about basing long range maritime recon aircraft (Tu-142) and bombers (Tu-160) in Cuba and Venezuela. This caused an uproar in the Western hemisphere. Cuba and Venezuela expressed interest while there was a less friendly reaction in the United States. The Russian government soon announced that there was never any intention to build bases in South America. Instead the plan was simply to land there and refuel before flying back to northern Russia. Cuba was such a base during the Cold War, but the maritime recon missions were of limited use, because space satellites did the job more efficiently. Making those flights today are PR exercises.
    November 11, 2014: Russia has launched a new international news service called Sputnik. The new service will broadcast in 30 languages via web sites, radio stations and social media. Sputnik is doing this quickly by absorbing the former RIA Novosti and Voice of Russia Radio foreign operations. Russia calls Sputnik an attempt to counter the erroneous and hostile reporting most world media does about Russia. In particular Sputnik will portray Russia as innocent of any interference in Ukrainian affairs and make the case that all the problems in Ukraine are the result of Western meddling and part of a vast Western conspiracy to weaken Russia.
    Eyewitness reports are coming in from eastern Ukraine, along with some photos, of large number of Russian troops, and equipment, entering rebel held areas in Donbas. Russia denied this. The vehicles had their military markings removed, but there was no mistaking they were Russian military vehicles. Some of them had weapons showing, including towed artillery.
    The government revealed that it has sold Egypt some S-300 anti-aircraft missile systems. The S-300 is roughly equivalent to the American Patriot system. A year ago the Russian missile cruiser Varyag visited Egypt, the first such visit since the Cold War ended in 1991. Egypt continues to be a popular vacation spot for Russians, especially during the long Russian Winter. Russians still feel welcome in Egypt.
    November 10, 2014: Responding to appeals from Iraq for more rapid delivery of military equipment Russia has, as of early November, delivered 12 of 28 Mi-35M armed transport helicopters and three of fifteen MI-28NA helicopter gunships. Some self-propelled rocket launchers were also sent early. Less urgently needed, but delivered early anyway, were some twin launchers for SA-16/18 anti-aircraft missiles (which were also delivered) and several of the Pantsir-S1 anti-aircraft vehicles.
    November 8, 2014: Former Soviet leader Mikhail Gorbachev warned that the world was entering a new Cold War because of the Ukraine situation. Gorbachev blames the West for this. Gorbachev was the last leader of the Soviet Union, which collapsed under him when a coup attempt by Soviet hard liners (who opposed Gorbachev’s reforms) failed because most Russians opposed Soviet officials in general, and the Soviet Union in particular. After that the Soviet Union was dissolved. Despite that Soviet era officials have run Russia ever since. Gorbachev and Putin both agree that the demise of the Soviet Union was a great loss and rebuilding it would be a splendid idea. Many of the economic reforms Gorbachev proposed for the Soviet Union were carried out in post-Soviet Russia. Despite that Gorbachev is widely reviled in Russia as the man who “lost the Cold War.” This is unfair, but that’s how it rolls in the New Russia.
    November 5, 2014: In eastern Ukraine (Donbas) pro-Russian rebels, in the wake of November 2nd elections, swore in a rebel leader as the president of the new “people’s republic” of Donetsk.
    China and Russia signed a series of agreements to cooperate more closely on military matters. This is another indication of Russia ending nearly a decade of feuding with China over Chinese theft of Russian military technology. In part this latest batch of agreements is also to firm up the alliance with China because of the growing list of economic sanctions on Russia by the West over Russian aggression in Ukraine (and other new states that used to be part of the Soviet Union). China is the only real (as in useful) ally Russia has in this conflict with the West.
    November 4, 2014: In eastern Ukraine there was a sharp increase in rebel activity with the rebels making 26 separate attacks. All were repulsed but most of them were small scale and many were directed at civilian targets. Ukraine responded by sending more troops to the east. Ukraine has been training reservists and new recruits for months now and refurbishing old weapons and equipment and sending them east as well. Many of the reinforcements showed up at the port city of Mariupol, which had been the target of rebel attacks in the past.
    November 3, 2014: Indian Air Force officers have made it clear that they do not expect to see their production models of the new Russian “5th generation” T-50 (or PAK-FA) fighter until 2025, six years later than the Russians have been promising. The T-50 is the Russian answer to the U.S. F-22 and according to Indian officers the Russian aircraft is in big trouble. Indian officers noted that the T-50 as it is currently put together is unreliable, especially the new engine. The Russian radar, which promised so much has delivered, according to the Indians, insufficient performance. The Indians also noted that the T-50s stealth features were unsatisfactory. The Indians are also unhappy with Russian refusal to share many technical details. The per-aircraft price is also considered too high.
    In Crimea Russia has ordered all Catholic clergy out by the end of the year.
    November 2, 2014: In eastern Ukraine (Donbas) pro-Russian rebels held their election. As expected pro-Russian rebel leaders triumphed. Ukraine, the UN and the West condemned the elections as a sham and a disgrace.
    November 1, 2014: North Korea admitted that it had restored a retired Russian Golf class ballistic missile submarine to service. Russia built 23 of these 2,800 ton diesel-electric boats. Each had three launch tubes in its elongated sail. The Golfs were in service from 1958-1990, and the last of them carried the 16 ton R-21 (SS-N-5) ballistic missile, which had a max range of 1,600 kilometers and carried a single nuclear warhead. North Korea received ten decommissioned Golf class boats in 1993, to be turned into scrap. North Korea bought a lot of retired Russian military gear in the 1990s, stuff that was being disposed of as scrap. Some of this obsolete gear was returned to some degree of service and restoring this Golf class sub is the most ambitious effort so far. It is unclear if North Korea actually has a ballistic missile that will operate from a Golf class sub as the silos on these boats were designed for a specific missile.
    October 31, 2014: Another Topol M ICBM, an RS-12M model, was successfully test fired. This model was Russia's first solid fuel ICBM, and the first (and so far only) mobile (via truck or railroad) ICBM. Test firings are essential to make sure older missiles will still fly or to test new features. Russia said the RS-12Ms had been equipped with new capabilities to deceive anti-missile defenses. This is the second such Topol M test this year.
     
  7. ColdPlay

    ColdPlay Lieutenant FULL MEMBER

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    Russian currency is badly hit though.
     
  8. Averageamerican

    Averageamerican Colonel ELITE MEMBER

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    Ruble hits new record low; Europe stocks higher
    [​IMG]
    By The Associated Press 11 minutes ago


    RUSSIA'S PAIN: The ruble crashed through 60 to the dollar, trading at 60.33 by early afternoon. The falling price of oil — the chief source of Russian exports and tax revenues — has weighed heavily on the currency. The ruble started the year at 32.85 to the dollar.
    Even a small increase in the oil price Monday didn't help. The ruble's fall puts pressure on ordinary people through higher prices for imported goods, and could hurt companies and banks that must repay debts in dollars.
    OIL SLUMP: Oil inched higher after another rout on Friday that was sparked by the International Energy Agency saying that global demand will grow less than previously forecast next year. On Monday, benchmark U.S. crude was up 49 cents at $58.30 a barrel in electronic trading on the New York Mercantile Exchange.
     
  9. Averageamerican

    Averageamerican Colonel ELITE MEMBER

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    Russia mainly exports:
    1. Gas, crude oil and other mineral products: 65.7% (here and followind as for 2006).
    2. Metals, precious stones and articles there of: 16.4%.
    3. Machinery, equipment and transport means: 5.8%.


    Russia mainly imports:
    1. Machinery, equipment and transport means: 47.7%.
    2. Chemical products, rubber: 15.8%.
    3. Foodstuffs and agricultural raw materials (excluding textile): 15.7

    1. Imports now cost Russia twice what they did at the beginning of 2014.

    1. Not areas the Russians are going to over come easily or cheaply

    1. According to one of the studies, by Strategy Partners, a Moscow management consultancy, Russia's average labor productivity is just 17% of the U.S. level. The amount varies by sector, from a low of 6% in machine building to a high of 22% in the natural resource industries. But the room for improvement is colossal everywhere. "If, in Russia, a mere 10% of workers had the same level of productivity as in the U.S., Russia's GDP would increase by one and a half times," notes Alexander Idrisov, managing partner of Strategy Partners.
     
  10. Averageamerican

    Averageamerican Colonel ELITE MEMBER

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    Russia's productivity looks bad even in comparison with other emerging markets. In 2007, the World Bank estimated that revenues per worker in Russia were only around $7,000 per head per year. That's around 20% lower than in India, and 40% lower than in China. The figure is especially troubling when you consider that Russia's labor costs are about double the level in either India or China.
    Outdated Technology
    Why is Russian productivity so low? "Why should it be high?" asks Boris Kuznetsov, chief researcher at the Higher School of Economics in Moscow. "Let's look at the history. Very few big enterprises were constructed in the last 20 years, so the technology is old. In China, you have very cheap labor and up-to-date technologies because they were imported recently."
     
  11. HMS Astute

    HMS Astute BANNED BANNED

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  12. HMS Astute

    HMS Astute BANNED BANNED

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    Why Germany Is No Longer Russia's Best Western Friend | The Moscow Times

    [​IMG]

    Germany has been Russia's key partner in Europe since the collapse of the Soviet Union, but there are signs that Berlin is prepared to change this situation — and the sticking issues will take a long time to resolve and could determine the future of Russia-Europe relations as a whole, analysts say.

    Last week, German Chancellor Angela Merkel toughened her rhetoric on Russian President Vladimir Putin in an apparent sign she is prepared to endure a long-term confrontation."The actions of Russia [in Ukraine] have called the peaceful order in Europe into question and are a violation of international law," she said in a speech in parliament Wednesday."Economic sanctions remain unavoidable and show that in our efforts to get through the crisis we will need patience and perseverance," she said.

    In the same week, the annual meeting of the high-profile St. Petersburg Dialogue Germany-Russia forum that was attended by Merkel and Putin in person was postponed indefinitely, the forum's organizer Martin Hoffman told The Moscow Times."We are losing Russia not in terms of Putin and elites, but in terms of people at large," Hoffman, the director of German-Russian forum said in a phone interview.The meeting of the forum's chairs was scheduled for Dec. 1, but was canceled due to Germany's demand to reform the forum for it to include more independent civil society members.​
     
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  13. brahmos_ii

    brahmos_ii Major SENIOR MEMBER

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    The new Russian sanctions bill passed by Congress takes the restrictive measures to a whole new level, as it could for the first time include secondary sanctions that would target non-US persons and entities, a legal expert has told Sputnik.
    "This bill takes the sanctions that are possibly imposable against Russia to a different, higher level, because now foreign persons and foreign financial institutions with no nexus to the US can be sanctioned for certain activities – limited or proscribed – in Russia," Louis Rothberg, a legal counsel at the Morgan Lewis law firm, who has handled export control issues for US government agencies, said Monday.

    Under Section 4 of the bill, which still needs to be signed by US President Barack Obama, the president would be authorized to impose sanctions on foreign entities dealing in prohibited or restricted activities in Russia.

    "If you are an Asian company and you want to step into the shoes of what a US company used to be doing in a Russian crude oil project, and the US company cannot be doing that now because of sanctions…the [US] president can zap you with a menu of possible sanctions," Rothberg explained.

    Similar to US sanctions against Iran, Section 5 of the sanctions bill would target foreign financial institutions investing in proscribed activities in Russia, including funding of non-US entities engaged in prohibited activities in Russia. The sanctions could cut off a foreign bank from doing business in the US and international financial markets, Rothberg said.

    "If you are legitimate foreign bank and you get restricted on how you can access the US banking system your ability to work as a true international bank is really adversely affected," Rothberg said, stressing that the restrictions "could induce foreign banks to think very hard about certain transactions with foreign persons where those foreign persons are undertaking certain activities in Russia that are sanctionable".

    The US Senate and House passed the bill, titled the "Ukraine Freedom Support Act" last week. If Obama authorizes the bill, it would add on to the sanctions already imposed by the United States, the European Union and their allies against Russia over its alleged involvement in the Ukrainian crisis.

    Russia has repeatedly stressed that sanctions, which are not justified, since Russia has never interfered in Ukraine's internal affairs, are counterproductive and threaten international stability, harming not only the target country, but also those using the restrictive measures.

    Congress Bill Takes US Sanctions Against Russia to ‘Higher Level’: Expert / Sputnik International
     
  14. HMS Astute

    HMS Astute BANNED BANNED

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    Seems like Russian economy under Putin's regime collapses much faster than Soviet Union under Stalin regime.
     
  15. ГЛОНАСС

    ГЛОНАСС BANNED BANNED

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