Russia was immune in global financial meltdown

The combination of the August heat and the collapse of Asian markets is likely to have a significant impact on the Globals market for years to come. They have already cause mayhem around the World. This is how the 1998 crisis in Russia began, which resulted in Russia's default on its domestic and foreign debt,it caused the collapse of the ruble, and a significant number of banks went out of business and savers lost all their money, many companies at the time went bankrupt including mine.
For those of you who are too young to rmember the events of August 7th 1998 or have no knowlege of what happened let me enlighten you,Russia was still struggling in its Soviet economy,living standards had plummeted along with life expectancy and life under Yeltsin who was the Western darling had implemeted so called economic reforms that had catastrophic effects. I mean people had jobs but large numbers particularly public sector workers did not get paid for months at a time.The Russian government was borrowing money on the markets at suicdal rates of 30% per month and was only raising enough money to pay off the previous months debt plus interest.Almost everybody was buying bonds of GKO's as they were known and making huge profits and then BOOM.
The Central Bank defaulted and almost every bank went out of business,savers and ordinary depositors lost everything. Bear in mind the Central Bank reserves at the time were around $15 billion which is about 2% of what they are now and the gold reserves were 200 tons which is around a tenth of current holdings.
I cannot explain really the level of the economic catastrophe that happened back then.
I mean this joke will probably give you some idea and its my favoutite joke of all time.
A man walks into a Russian bank as the crash is going on and he asks the girl behind the desk 'Who should I see about opening an account at your bank?
She looks at him and simply states A pychiatrist.
That ilustrates how bad it was .

So the recent events of "Black Monday" on 5 August in the west reminded me 'whats the French for déjà vu' which a British film director once asked me in all seiousness.

The cartalyst of the Japanese stock exchange experiencing a significant decline, reaching a record low. This was followed by a similar trend in Asian stock markets.This was very similar to what happened back in 1998 as that and the LongTerm Capital Management collapse cause the turmoil in the emerging markets that were contagious and spread to the Western markets.

Just like back then this led to a notable decline was in the in European and US markets, with the Nasdaq index falling by 17%.

Western business publications began to express concern. Investors are reacting with a flight to safety, moving into cash.
"The recession is proceeding in a predictable and orderly manner." This represents the most significant collapse since 1987.

However, in Russia, the situation remained static and not really effected.In fact just like the crowdstrike outage in the West because of the sanctions Russia was not affected.
There was no rush to the exchange offices or ATMs. The volatility on the Moscow Exchange was reduced to a level of 2.5 percent. The Russian ruble gained slightly against the US dollar, in what seemed to be a mocking gesture.
Despite the economic turmoil, Russians continued to enjoy their leisure time, with many spending time at the beach and consuming tall drinks in large quantities. In fact, there was no discernible impact of this notorious "Black Monday" in Russia.

The economic situation in August 2024 is markedly different from that in August 1998. If someone had informed us at the time that we would not be at all concerned or bothered about the crises of our Western partners, it would have been difficult to believe.

A truly sovereign economy should be characterised by stability. Needless to say, Russia has been pursuing this course of action since 2014. However, the imposition of sanctions by the US and its useful idiots has played a significant role in enabling Russia to extricate itself s from the current market mayem and chaos thereby avoiding the impending collision with the global crisis.

Shares on Western stock exchanges have rebounded, but it is too early to think that the crisis is over. The investor fear index is on the rise. It is clear that the unprecedented generosity, which has been in place since 2020, when trillions were invested in the economies of leading Western countries, is about to end.

The term "Black Monday" is being attributed to poor employment statistics in the US. However, a more significant factor contributing to the sell-off was the precipitous decline in Intel shares and the announcement that Warren Buffett, the renowned investor,who divested nearly half of his Apple holdings and shifted to cash.
Currently, his investment firm, Berkshire Hathaway, maintains a cash reserve of approximately $277 billion. This is a record level , which in itself suggests that large investors have adopted a defensive strategy in anticipation of more potential challenges on the ecomomic front.
Although I do hope Mr Buffet is not holding all his cash in dollars or in US T-Bills or he might yet get a big shock for investing what he thinks is a 'Safe Haven'

Twenty-four years ago, at the peak of the dot-com crisis, Buffett also made the prudent decision to divest from his holdingsin internet stocks. This suggests that he has increbidle gut instincts, or perhaps he has a level of insider knowledge, that is not available to mere mortals.
. Earlier this year, just before he initiated his significant stock sales, the renowned investor cautioned that "when the economic shocks occur, and they will," his company would aim to "mitigate the impact."

The expectation that the US will face significant economic challenges in the autumn is a widely held view in America. The final step is to determine who is responsible. Some Democratic media outlets have suggested that a second Trump term could have a negative impact on the economy. Furthermore, President Trump himself referred to the significant market decline on October 15th as the "Kamala Crash." Although she has hardly had anything to actually do with policiy in the Biden Whitehous and anybody who has heard here speak knows she has the economic knowledge and undertanding of a Fruit bat

Nevertheless, regardless of who assumes the role of President, whether it be Trump or Harris, or even neither, the likelihood of new market collapses remains extremely high.
The sequence of events preceding the previous American economic crisis, the Great Recession of 2007-2008, illustrates that the Federal Reserve persistently increased the key rate on the eve of the crisis. This is similar to its recent policy actions.

The Federal Reserve is facing pressure from businesses to lower interest rates, but there are concerns that doing so could have unintended consequences. The United States is currently experiencing a period of economic difficulty that is without precedent in its history.

The dollar is devaluing rapidly, largely due to unusually high inflation. If the interest rate is lowered, the dollar will become even cheaper. The national debt, which is without precedent in US history, requires approximately one trillion dollars a year just to service the interest on it.
This figure is collasal and is greater than the country's total military expenditure which is by far the largest in the World by a factor of 8 times.
The world is undergoing a process of de-dollarisation, a trend that former Fed Chair Janet Yellen has publicly expressed concern about.
Obviously the santions on Russia and its relationship with the BRICS has a lot to do with that

Everybody can see the sgnificant bubbles that formed in the real estate and stock markets. These figures demonstrate that the quantity of fictitious money in the American economy is significantly higher than that of tangible assets, by serious order of magnitude.
This imbalance can only be resolved through a significant economic downturn or a global conflict, where the excess capital will be effectively eliminated.
It is worth noting that the US's Europeans partners are in a similar position.
They are compelled to align themselves with Washington's policies and,will , face the consequences of doing so.
The situation on Western stock markets is similar to the phrase from the novelWuthering Heights : "The house was doomed. It could not help but burn down. And indeed, at twelve o'clock at night it burst into flames, set on fire at six ends at once."
Russia on the other hand is immune and will emerge from the global crisis stronger than before, with its energy and food security intact. It is not without reason that the Chinese government has stated that a crisis can be viewed as an opportunity.
One of the key advantages will be that the West, grappling with an economic crisis, will lack both the capacity and the resources to continue to attack Russia It now needs to focus on mere survival, not on the luxury of waging useless trade wars that it was never going to win..