
Just has reviewed Oscar recorded show, it really cost me a long time... However, back to my interest is the global economy, today I am gonna talk something about the Russian economy based on my personal view:
Russia has been working on the economy revolution since early 90's, however, it doesn't work successfully usually. Until Putin has been the president, to reshape the reputation and international image of Russian, all Putin needs is a highly efficient economy development plan.
However, Russia has
adopted a plan with highly risk: By exporting highly priced energy, raw materials and
comparatively low cost foreign loans to make
further development to the whole Russian nation.
From the beginning, everything went on well with the highly priced energy and material, so most of the largest companies in Russia had made business plan based on that assumption which is energy price could stay forever, and with that Russia could absorb the whole world's wealth as much as possible. So under this situation, the Russian companies started to take loans to expand their
infrastructure to make further productions and
exportation of the energy and material products. At that moment, the interest rate of borrowing money from the Russian government was over 13%, while if choosing take loans from global investment banks, it only
cost 2% around.
So most of the companies including Russian national gas, oil, steel companies took loans from the global investment banks, with the
mortgage of their real properties and over-priced stock shares. And they thought if the price of their stock continues to boom, the less cost to pay back the loan, but, only, only if the energy price continues to soar or stay on a high level which like over 100
USD per barrel of crude oil.
But after late 2008, the energy price started to drop
hysterically while their stock prices was shrinking to 30% at the same time, more importantly, the investment banks started to ask to loans back. What a poor situation for Russia... they don't have money or stock to pay back, not enough revenue either because of the under
USD 50 per barrel crude oil, so what they could pay back is their only left properties, which means, years' of the Russian people's effort and work has been given to investment bank as the 2009's gift.
Mr.Putin was trying to make some effort to save this situation of the Nation's largest companies' gonna went to investment banks, however, there were not enough, at 25% could be saved even with the whole Russian' accumulated wealth.
All of these analysis was based on my personal view, from
Yangtsefly, only could be your reference.
It has been raining all day long, and today the office started to become more and more perfect, with a panaroma shot of our office attached and this series was made on Chander sir' request and I was really enjoying making this for our company. And the photo attached in the blog is the one I took after office work, our office building under the shadow of the moon.