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Russian default risk tops Iceland as crisis deepens

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posted on Oct, 23 2008 @ 07:53 PM
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Russian default risk tops Iceland as crisis deepens


www.tel egraph.co.uk

Hans Redeker, currency chief at BNP Paribas, said markets no longer believe Russia is strong enough to guarantee the estimated $530bn of foreign debts accumulated by its companies during the break-neck expansion of the oil boom. "The surge in Russian CDS spreads is paralysing the whole system. The government can offer very little help to the banks at this point because its own sovereign debt is in question," he said.

"This crisis is starting to look like the Black Wednesday in 1992. Unless we see an extension of central bank swaps in dollars and euros to Eastern Europe within days to stop this uncontrolled process of deleveraging, this could get out of control and do serious damage to Western Europe. We could see the euro fall to parity against the dollar by next year," he said.
(visit the link for the full news article)


Related News Links:
online.wsj.com
www.bloomberg.com

Related AboveTopSecret.com Discussion Threads:
Financial crisis: Iceland's dreams go up in smoke




posted on Oct, 23 2008 @ 07:53 PM
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This is a disturbing development in the economic crisis; one more in a domino effect across portions of Eastern Europe.

Romania had to raise overnight interest rates to 900pc on Wednesday to stem capital flight, recalling the wild episodes of Europe's ERM crisis in 1992. The CDS spreads on Ukraine's debt have topped 2,800, signaling total revulsion by investors.

Rating agency Standard & Poor's issued a downgrade alert on Russian bonds yesterday, warning that a series of state rescue packages worth $200bn (£124bn) could start to erode the credit-worthiness of the state.


Russia's credit rating was indeed downgraded today, fueling more concern that Russia could fall the way Iceland fell. With at least three other Eastern European countries as well as Argentina and Pakistan beginning to buckle under the strain, money is quickly leaving those countries and moving into comparatively stronger currencies such as the US dollar and the Japanese Yen.

www.tel egraph.co.uk
(visit the link for the full news article)



posted on Oct, 23 2008 @ 08:01 PM
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The global nature and ensuing implications of this economic unravelling grows daily, as do my concerns that we're headed for some really dark days.

What those days are, I'm not really sure but all the things I learned in those economics classes makes no sense. Commodities slumping, values dropping, confidence swooning . . . where will it end.

Then we get the supposed minds that got us into this mess confessing that they didn't see it coming, had no idea it would get this bad, figured the world's financiers would curb their greedy impulses and police their own actions . . . it is all scary.

I'm not predicting total doom. As I said, I've really no idea where this will end.

I've never really put much stock into 'stocking up', stashing food and water and all that paranoia-fed stuff, but I find myself gradually building me a stockpile of the necessary goods and am aiming for January as the time we're going to have to hunker down and ride out the worst of the storm.

It is just my gut that it will last quite a while, too.

Scary, folks.

Simply scary.



posted on Oct, 23 2008 @ 08:21 PM
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Originally posted by GoalPoster
The global nature and ensuing implications of this economic unraveling grows daily, as do my concerns that we're headed for some really dark days.

What those days are, I'm not really sure but all the things I learned in those economics classes makes no sense. Commodities slumping, values dropping, confidence swooning . . . where will it end.



I agree. Everything I know about economics seems to no longer apply. The bits and pieces of what we are being told do not add up. It may be that we are in uncharted territory, and that IS scary.

I also heard an economist say today that this isn't the worse the USA has seen since the Great Depression, it is the worst off we have been since the American Revolution. I thought oh hell, I don't even have a point of reference for that. Although I assumed he was talking about debt ratio.



posted on Oct, 23 2008 @ 08:49 PM
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Originally posted by seejanerun
I agree. Everything I know about economics seems to no longer apply. The bits and pieces of what we are being told do not add up. It may be that we are in uncharted territory, and that IS scary.


I think "uncharted territory" is exactly what's going on right now. Looking at this from a non-conspiratorial angle (i.e. I'm leaving out the "it was engineered" possibility), this whole crisis/meltdown/whatever you want to call it has similarities to past crashes, yet overall it's so very different. The global economy is so intertwined - infinitely more so than it was in 87, 29, 07, 1873, etc - that the biggest mistake those who are trying to fix it are making is treating this like past crashes.

Bernanke and Paulson are pulling out tricks from the Great Depression bag to try and "fix" what ails us, but they're not working. I think these tricks aren't working because, indeed, we are in uncharted territory. Saves from 80 years ago won't necessarily work on these new markets we've created, and no one is entirely sure what WILL work.



posted on Oct, 23 2008 @ 08:54 PM
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reply to post by anachryon
 


Russia's economy expanded to far to quickly .. at the first sign of restriction the system is unsound, unsafe and at great risk.

What's hurting Russia as a double hit here is the fact that oil prices have fallen significantly.. meaning the Russian Government which expanded spending due to the surge in new funds from oil and gas sales is now running in Red ink.



I feel sorry for Russia.. they struggled to make it, and the people there where just starting to experience the economy expansion with the construction of better infrastructure, wage increases, urban development and a general rise in living conditions.

Just to see it squandered away..



posted on Oct, 23 2008 @ 08:57 PM
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reply to post by seejanerun
 


America was near bankruptcy (literally) not long after the Revolution.. in fact it was uncertain how long we would even last as a nation.. which we almost did not..

It took a huge Government effort to cut spending and put everything they could to pay down debts...

At one point we sent Diplomats to Morocco to beg their forgiveness for debt payments we couldn't make. Think about that. America pleading a country like Morocco.



posted on Oct, 23 2008 @ 09:11 PM
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Man this situation is just getting worse and worse all the time. However, I've been laid off since July but just got a pretty good job offer today. Maybe things are not as bad as people are making it out to be.....I think that is wishful thinking.


Sometimes I wonder if maybe, just maybe, the U.S. government is trying to prop up the economy until after the election. The excrement will probably hit the fan soon.



posted on Oct, 23 2008 @ 09:17 PM
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February is when I say TSHTF .. gives time for the new guy to be sworn in and everything.



posted on Oct, 23 2008 @ 09:20 PM
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Originally posted by Rockpuck
February is when I say TSHTF .. gives time for the new guy to be sworn in and everything.


I would agree with that. Perhaps that is the crisis (or test) biden was referring to. Maybe he knows that the economy is being propped up until after the election.



posted on Oct, 23 2008 @ 09:23 PM
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Well I was saying that specifically in reference to Christmas actually.. I believe it will be the straw that breaks the camels back. Poor sales, poor profits, stocks will tumble, people will get laid off.



posted on Oct, 23 2008 @ 09:25 PM
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reply to post by LiquidMirage
 


That is exactly what I have been saying for a long time since the crisis started, Paulson and bernanke are just keeping the markets good until they can get away with finishing stealing whatever is left of the American tax payer money for their donor base and global banks.

And for Russia well if Europe dump the dollar that will be the end of US supremacy.



posted on Oct, 23 2008 @ 09:37 PM
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reply to post by anachryon
 


It is indeed different but it's more like asking a thief to pay back their debts to victims rather than serve time. Most thieves would serve time instead. Now they can point to other thieves who also say to the judge "but they did it too!" and "It wasn't MY idea!".

Right now most are hanging on but the point is near when all countries are going to throw their hands up in the air. When that happens, failure is acceptable and less a sentence than paying back, as in the thief example.

I personally don't think even gold or silver will help much. Loss of confidence in humanity can't be regained by holding a piece of metal.

The odometer is at 999998... 2 miles (months) to go before roll over and BAM! Just like that, all debts will be erased and a new financial system established, WITHOUT the old crime families involvement. No doubt in my mind that's what this push is REALLY all about. Heck the queen of england just asked for a raise and was shot down! No wonder prince phillip converted his jag to use biofuel. Enough lard in that house to keep them fueled for generations and enough hot air steaming out of their mouths to warm buckingham. Maybe now they will sell off some of those billions worth of UNOPENED gifts on ebay for worthless paper.

[edit on 23-10-2008 by Atlantican]



posted on Oct, 23 2008 @ 10:03 PM
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Originally posted by Rockpuck
America was near bankruptcy (literally) not long after the Revolution.. in fact it was uncertain how long we would even last as a nation.. which we almost did not..


I'm not sure we aren't in the same position now.




posted on Oct, 24 2008 @ 10:26 AM
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hey thanks for linking to my thread in the OP regarding Iceland's financial "crisis"!
www.abovetopsecret.com...

i really think it's important, even though i live in America, because it seems the problems facing Iceland can be easily mirrored by our own decaying economy...



posted on Oct, 24 2008 @ 11:01 AM
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Russia being crushed? ... Well that's a turn of event nobody could have foreseen in the last 6 months...

And it all started because the US financed Georgia to attack South Ossetia and Russia's peacekeepers... The US doing tricks again.



posted on Oct, 24 2008 @ 11:15 AM
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reply to post by Vitchilo
 


I thought the same thing,the timing of NATO-Russia stand-off,i think it is much more complicated to be an orchestrated economic war on Russia.



posted on Oct, 24 2008 @ 11:25 AM
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Excellent post Anachryon.

This is really a telling sign of things to come IMO.

What REALLY scares me is the derivative market starting to unwind at a fast pace. With that, God help us all.


AB1



posted on Oct, 24 2008 @ 06:20 PM
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Originally posted by Vitchilo
Russia being crushed? ... Well that's a turn of event nobody could have foreseen in the last 6 months...

And it all started because the US financed Georgia to attack South Ossetia and Russia's peacekeepers... The US doing tricks again.


How did that bring about a collapse of the oil markets? Which was the undoing of Russia?

It will be America that will most likely (continue) financial aid to Russia to stop it from complete collapse. Again.



posted on Oct, 25 2008 @ 12:00 PM
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Russia has massive natural gas and oil reserves alongside advanced nuclear technology, so no worries for Russia , the financial crunch is just temporary ...

but the USA is heading for a massive economic collapse




It will be America that will most likely (continue) financial aid to Russia to stop it from complete collapse.


and how so ??? USA is totally debt ridden with massive fiscal deficits,national and external debt ......

Russia is much safer state than USA , USA is a slowily failing state and if OPEC and saudis abandon the dollar, consider it the death knell for the US empire




The ``skyrocketing'' cost of financial rescue operations is not ``only true for Russia,'' said Pavel Pikulev, a fixed-income strategist at Trust Investment Bank in Moscow. ``At least Russia still has a budget surplus and the third biggest foreign reserves in the world, while many other nations are already saving their banks using their good name more than real funds.''
www.bloomberg.com...


lol, the world is going to laugh when USA will beg China for aid


Russia being crushed? ... Well that's a turn of event nobody could have foreseen in the last 6 months... And it all started because the US financed Georgia to attack South Ossetia and Russia's peacekeepers... The US doing tricks again.


russia being crushed ??? nah, Russia and China have bankrupted the USA , China by economic warfare and Russia by assymetric military and political responses , that have stretched american resources and emboldening nations like Iran,Venezuala etc. that are highly anti american

[edit on 25-10-2008 by sadchild01]

[edit on 25-10-2008 by sadchild01]

[edit on 25-10-2008 by sadchild01]



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