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After years of attack, Wall Street concedes Putin has made Russia “bulletproof” (Video)

The Duran Quick Take: Episode 386.

The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris discuss the Russian economy and its transformation away from western institutional control and the dollar hegemony.

Even Wall Street investors are now taking a look at Russia’s well managed economy, low debt and excellent balance sheet.


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“Stay Strong, Go Long – Bulletproof Russia Becomes Contrarian Haven”, authored by Tom Luongo via Gold, Goats n Guns…

It’s a tough road being a contrarian on Russia. This is especially true today when the entirety of the U.S. and European political system is aligned to demonize Russia at nearly every level.

And the main reason for this is that Russia under President Vladimir Putin refuses to do the West’s bidding both at home and abroad. The central tenet of U.S. foreign policy is that U.S. concerns, no matter where they are, are supreme and everyone else’s are subordinate.

Russia under Putin doesn’t play that game. He hasn’t for nearly twenty years now. This is not to say, of course, that objectively speaking Putin is a good man or even a good leader. In studying Putin for the past seven years I’ve come to one inescapable conclusion.

He was exactly the leader Russia needed to dig the country out of the abyss it found itself in when he took over. He is exactly the kind of leader Russia needs to guide it through the next period of history.

So much analysis of Putin and Russia is so thoroughly ideologically tainted that, on that basis alone, it should be dismissed out of hand. And it has been successful enough that even the best analysts who are truly skeptical of the U.S. narrative still get some of the basics about Russia and Putin horribly wrong.

I’ve been recommending Russia as an investment to people since early 2015 and its state-owned gas giant Gazprom (NYSE:OGZPY) since mid-2014. I haven’t wavered in that recommendation, despite the ups and downs.

And the reason for this is simple. While markets do not trade on fundamentals every day, over the long run a market’s or stock’s fundamentals do eventually overcome sentiment and assert themselves on the price.

So, in 2014 when oil prices collapsed so did the price of Gazprom. The ruble went through a crisis intended to oust Putin from power in revenge for his thwarting the U.S. takeover of Crimea.

Putin’s deft handling of the ruble crisis and Russia’s impeccable national balance sheet allowed both to survive and begin digging the country out of the latest hole placed in front of it.

Since then the U.S. has piled on obstacle after obstacle in front of Russia in the global marketplace for capital. The Magnitsky Act has been used like a bludgeon to scare investors away from the land of the Evil Putin.

False flags and overt provocations to war in Syria, Ukraine and the U.K. have slowed the pace of investment in Russia’s capital markets. Gazprom for years languished both because of the political risks of U.S. pressure in Europe to stop first the South Stream and then the Nordstream 2 pipelines.

Frivolous lawsuits from Ukraine, the EU and the Baltics have dogged the company for years. The EU has changed its laws to retroactively try and gain a legal upper hand on Gazprom’s pricing of natural gas. But, ultimately, none of it has worked.

Slowly, but surely, Russia’s fundamentals and its stable and improving political situation are winning the hearts of investors looking for yield in a yield-free world.

An article in Forbes last week documented this shift in sentiment perfectly.

“They’ve made themselves bulletproof,” says James Barrineau, co-head of emerging-market debt for Schroders Investment in New York. “They can pay off all their foreign debts with their central bank reserves. Plus, they’re cutting interest rates. The currency is very stable. And they have room on the fiscal side to spend on their economy.”

The first point is something I pointed out in 2015. The numbers were this good then. And yet, the ratings agencies, like dutiful quislings, cut Russia’s ratings to junk status.

And they did this against fundamentals like having enough money to pay off the entire country’s debt load, public and private, and at the time at 13.3% debt-to-GDP ratio. Today that ratio stands, after a currency crisis, at just 11.8%.

Someone remind me what the U.S.’s is?

As always, what the world responded to was the hardship of the U.S. all but kicking Russia out of the dollar-funding markets. The only step not taken against Russia was removing it from the SWIFT interbank messsaging system.

That wasn’t done for the same reasons that it wasn’t reinstated by Trump on Iran after he pulled out of the JCPOA. It doesn’t work. All it does is hasten the rate at which the country learns to work without U.S. dollars.

By 2019 Russia, China and Iran have alternatives to SWIFT to prosecute international trade outside of the U.S.’s purview. Once those transactions leave SWIFT the U.S. loses a very powerful monitoring tool.

And in surviving this full court press to destroy Russia financially and keep capital from fleeing there the U.S. has made it a stronger destination today than it would have ever been had it not gone this route.

Instead of isolating Russia financially and destroying the ruble, it actually made the dollar more suspect and raised the profile of the ruble across central Asia.

President Trump has weaponized the dollar to such an extent that he’s raised the costs of using it for countries that do significant business with Russia above that of the ruble.

And it starts with the political stability created by Putin and his deft diplomatic corps, led by Foreign Minister Sergei Lavrov. Putin has made it a point of always keeping his promises on the world stage, no matter how rocky the relationship.

Trump on the other hand has unilaterally bullied and sanctioned most of the world for not doing what he wants. Putin keeps making this point over and over again, Trump is destroying the long-term viability of the dollar. The key to that statement being ‘long-term.’

Because a country that acts honorably on the world stage, encourages trade over blackmail, honors its contracts even when the rules are arbitrarily changed against them and stands by its allies will generate the kind of good will that will increase the willingness of people locally to accept that country’s currency.

Since Trump went on his sanction the world policy, the ruble has been on a tear in international markets. While mildly strengthening versus the dollar (0.8%), the ruble has risen 11% versus the total basket of its trading partners (REER).

This is the clearest picture I can paint of the ruble decoupling from the U.S. dollar and it’s a trend worth watching into the future. Because as the dollar rises into the teeth of the brewing financial crisis (think European banking meltdown currently underway) the ruble will act as a port in the storm for those economies terminally short dollars.

With the Bank of Russia finally letting its boot off the neck of the Russian economy by lowering interest rates aggressively over the past four months, the Ruble hasn’t degraded one bit.

If anything all this has done is strengthen demand for the ruble as pent-up demand in the form of huge domestic savings now can be deployed as new business loans and corporate bond issues at far better rates a few months ago.

That said the Bank of Russia is still behind the curve by looking at the spread between the Overnight lending rate (a proxy for the benchmark rate) and the yield on a 1 year government note.

All that’s happened since Elvira Nabullina began cutting rates is demand for Russian debt has skyrocketed as investors in the West search for safe returns and across Emerging Markets starved of dollars. And while the ruble is nowhere close to overthrowing the dollar on the global stage and likely never will, it only takes a small shift in demand to create outsized effects on markets as comparatively small as Russia’s.

The rate of de-dollarization of the Russia economy is not as fast as the headlines would have you believe, but it is happening. The ruble now accounts for more than 30% of Russian exports and 20% of its overall international trade.

The world is insanely short dollars at this point and will continue to be for the next decade. That much is certain. It will fuel a massive dollar rally ove the next few years.

But Russia isn’t alone in the woods anymore on this path. India, Turkey, China, Iran and others understand what that reliance on the dollar means during economic downturns. And they are working with Putin to lay the groundwork to keep their economies from collapsing as the dollars flow out.

This is why Putin and Xi have been adamant about building ways to bypass the dollar for local trade. It will allow the dollar short positions of local companies to fade just like did for Russian companies after the ruble crisis in 2015.

Now that we’re four years beyond the worst of that and the political reality surrounding Russia far better than it was then, its stock market is booming, demand for its debt is rising and contrarian investors are looking for the next generational play to park their cash despite the obstacles the U.S. places in front of them.

The key for this will be the EU, as Russia’s trade with the EU in euros is nearly as big as it is in dollars now. This is what will prompt the rescinding of sanctions against Russia this year.

When that happens you can expect a big pop in the Moscow Exchange.


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John EllisOlivia KrothSmoking EagleJack_GarboShear the Sheeple Recent comment authors
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Sally Snyder
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Sally Snyder

Here are some interesting recent comments by Vladimir Putin about the changing role of the United States dollar as the world’s reserve currency:

https://viableopposition.blogspot.com/2019/11/de-dollarization-end-of-us-dollars.html

Given Washington’s penchant for using economic warfare as part of its efforts to retain its dominant status in the global village, one could easily see why nations would elect to insure themselves against such economic bullying.

John Ellis
Guest
John Ellis

From the KGB to a billionaire, to ruler supreme,
yet, you think he is straight out of heaven?

RussG553
Guest
RussG553

John, you are severely deluded about his wealth status. You should stop listening to all the propaganda and downright lies. Yes, I do think Putin is a gift from heaven!

Raba Maj
Guest
Raba Maj

Interesting how John knows Putin’s wealth status but would struggle to say how much Trump is worth. Reminds me of the US claiming to know about Sadam’s WMDs simply coz their dodgy intel community said so!

John Ellis
Guest
John Ellis

Putin, Trump and the guy ruling China are billionaires, doing what is in the best interest of their billions, yet you want us to quibble over their net worth?
You know my opinion on the crap KGB and Empire builders, yet you think that I am fooled by “their dodgy intel community”?

Jack_Garbo
Guest
Jack_Garbo

Simple question: Where’s evidence of Putin’s and Xi’s staggering wealth?

John Ellis
Guest
John Ellis

You talk about what you love most, wealth.
I talk about what we all need most, integrity.

John Ellis
Guest
John Ellis

Without question President Putin is the greatest statesman of our time, the best of all evils when it comes to putting Empire USA out of its misery, but notwithstanding, global warming will surely kill us all if we continue to think that billionaires should rule Russia, China and USA. A rich man’s paradise all the way.

Jack_Garbo
Guest
Jack_Garbo

Ah, the incoherence emerges. Non sequiturs the first symptom. Take a break, lie down.

John Ellis
Guest
John Ellis

No one has clicked your like button yet,
but have no fear,
a billion fools are born every year.

Jane Karlsson
Guest
Jane Karlsson

I hope you realise it’s Bill Browder who claims Putin is a billionaire. He says Putin stole $200 billion from the Russian people, according to an acquaintance of mine who heard him say so in a talk he gave here in Oxford. It’s a fairy tale, of course, like most of what Browder says.

John Ellis
Guest
John Ellis

When the one billion least intelligent humans are now being treated as less than cattle, as death by starvation is their destiny, you think that hoarding wealth is not a crime if it is less than a billion?

Trust Bolshevik Browder? Never
Guest
Trust Bolshevik Browder? Never

Browder just took what he stole and multiplied it by 100, for effect.

Tom Welsh
Guest
Tom Welsh

“This is not to say, of course, that objectively speaking Putin is a good man or even a good leader”.

I am so dreadfully sick and tired of seeing even sensible, well-informed, reputable commentators making those nasty, sneaky little disclaimers.

Are they afraid that, if they don’t, the CIA or MI6 will murder them?

All right: I will say it then. I believe that, objectively speaking, Vladimir Vladimirovich Putin is a good man and a good leader.

He is honest, truthful, fair, as far as his duties permit kind, and a good Christian.

John Ellis
Guest
John Ellis

Christ was a pacifist and a vegetarian with no more wealth than the poor.
Three things that neither you, Putin nor most professed Christians care to be. Hypocrites that you be.

Terry R
Guest
Terry R

Supposedly he died for your sins John, including your trolling.

John Ellis
Guest
John Ellis

With seven (7) billion sinners refusing to feed the one (1) billion least intelligent humans now starving to death, with the only purpose for planet earth being to establish, “God be true and every man a liar,” why would the purpose for Christ crucified be for such a stupid act of futility as to forgive perpetual and unending sin? Surely, Christ died to show us that God created sin for a purpose, by intelligent design God made us all sinners to establish as absolute, that God never held our sins against us. And for the simple reason that God never… Read more »

Smoking Eagle
Guest
Smoking Eagle

I agree with you. Vladimir Vladimirovich Putin is a good man and a good leader. They say that who you are and what you are becomes indelibly etched upon your face by the time you reach your mid-thirties. I look at Putin’s face, in particular his eyes and mouth, and I see gentleness and kindness, good humour, forthrightness and intelligence. As is the case with all of us, he can look very determined and angry at times, but the overriding impression is one of goodness and decency. If the world had more leaders like him, it would be a much… Read more »

Olivia Kroth
Guest

I agree a hundred percent with all you wrote, Smoking Eagle. This is a very good characterization of President Vladimir Putin.

Ukraine needs a Psychiatrist's Couch
Guest
Ukraine needs a Psychiatrist's Couch

I like to search on NordStream 2 News from time to time to see what the latest nonsense is. Here’s a typical Ukrainian bozo editorializing in the Military Times, as good sycophant bozos are inclined to do. He apparently has ‘discovered’ the real purpose behind NS2 (last sentence): To remove obstacles so that Russia can proceed to bully, blackmail and even invade, all previous transit countries unimpeded. Who swallows this swill? …………He writes: “All Russian gas pipelines that were built and are being built in recent years, including Nord Stream 2, have no economic sense. Thanks to these gas pipelines,… Read more »

John Ellis
Guest
John Ellis

THREE WAYS TO RULE
By competition, with those most intelligent hoarding all the wealth and power.
By socialism, with middle-speed thinkers hoarding all the wealth and power.
By compassion and charity producing a grateful response, allowing indigenous natives to rule themselves.

Olivia Kroth
Guest

I do not see why John got so many minus points here. As far as I am concerned, I find some truth in this saying, although it has got nothing to do with President Putin in Russia.

John Ellis
Guest
John Ellis

ROOT CAUSE
Billionaires rule USA, China and Russia.
So, quite natural is it for billionaires to also own all of mainstream media.
And so, quite natural is it for everyone to be brainwashed into thinking that bad government is the problem.

Raba Maj
Guest
Raba Maj

stop lying. You simply don’t know how much Putin is worth and your reliance on the ‘make it up as they go’ Sadam WMD/ tonnes of Uranium ore from Niger intel gossiping community is not worth the paper its written on.

John Ellis
Guest
John Ellis

You want to be a billionaire, so you worship billionaires.

Anonymous
Guest
Anonymous

I’m just happy to be a millionaire. Sposibo Rossiya 🙂

Terry R
Guest
Terry R

Germany and India have more billionaires than Russia. Do your research. Also , billionaires in Russia do not own the media but are more invested in resources. Again, do your research. Mainstream media tends to be congregated around a particular ethnic background across the Western world.

John Ellis
Guest
John Ellis

Worldwide, the richest of the rich own all of mainstream media. And that is why freedom of speech is sick fiction. For freedom of the press makes it impossible for anyone to be heard but the rich.
Stop blaming the Jews for all evil, for they are only 5% of the rich and therefore own only 5% of mainstream media.

BobValdez
Guest
BobValdez

“billionaires” WISH they ruled Russia and China. YOU wish you had an IQ above your shoe size.

John Ellis
Guest
John Ellis

IQ is the speed at which you can rationalize a problem and take all you can take. On the other hand, wisdom is the slowness at which you rationalize a problem and the careful way you give all you can give.
For the greater your IQ, the greater your potential for stupidity.

Olivia Kroth
Guest

Again here, why so many minus points for John? I find his wisdom quite convincing. I would modify the last sentence, though: “The greater the IQ, the greater the potential for evil”. The most evil men on earth had a rather high IQ, I am afraid.

Smoking Eagle
Guest
Smoking Eagle

Why do you think that billionaires have the ability to own all of the mainstream media? The answer to that is bad/corrupt governments permitting them to do so because they can then use them as a tool to brainwash the public. By the way, Germany has more billionaires than Russia. It’s not good enough to only do a billionaire headcount by country. Some of the smallest countries have the highest concentration of billionaires per capita. On the chart at the link you’ll find that the US is #13, Germany #15, and Canada #16. The per capita figures for Russia, China,… Read more »

Main Stream Mania
Guest
Main Stream Mania

I wish someone would make America bullshit proof.

Smoking Eagle
Guest
Smoking Eagle

I wish someone would make the world safe from US bullshit.

Main Stream Media
Guest
Main Stream Media

That’s exactly what I meant.

Main Stream Mania
Guest
Main Stream Mania

Oops, I meant Main Stream Mania. (And a mania the MSM is. Maniacal too.)

RussG553
Guest
RussG553

In the mid-fifties, Winston Churchill said, “Canada is the country of the future.” I now say, and WC would today as well, “Russia is the country of the future.”

oldandjaded
Member
oldandjaded

That b*st*rd Mulroney sold our birthright, and the pattern he began has continued ever since.

Never Forgive, Never Forget
Guest
Never Forgive, Never Forget

Freeland sort of took it back into the 1940’s though.

bero
Guest
bero

Russia friends, uh? I see. Deep State?. You’re the deep state. Worse yet, a foreign deep state.

Olivia Kroth
Guest

A very good article, thank you, Tom. It is comforting to read something positive about Russia, instead of constant Russia-bashing by western media. I also like the ruble. I use it a lot because I often travel to Russia.

oldandjaded
Member
oldandjaded

Hey Duran, can you set it up so that I can just automatically downvote all of John Ellis’ past AND future posts with one click? It would save wear and tear on my mouse….

BobValdez
Guest
BobValdez

It would be nicer if we could just block the idiot.

Smoking Eagle
Guest
Smoking Eagle

37 comments on this article so far.

14 of them compliments of John Ellis.

All told, 77 up votes and 58 down votes.

John Ellis’ posts have earned him all 58 down votes with not a single up vote.

You’d think he’d realize that this forum is not for him and do us all a favour by absenting himself.

Olivia Kroth
Guest

Your count is not correct. I gave John Ellis at least 2 upvotes, if not more. Please count again. Also I do NOT AGREE that John Ellis should “absent himself”. Please stop ostracizing Jonn Ellis.

Smoking Eagle
Guest
Smoking Eagle

It’s quite possible that I counted before the up votes were made. It’s also possible that I miscounted. Whichever the case, the fact remains that he has a huge number of down votes compared with the total number of votes.

Smoking Eagle
Guest
Smoking Eagle

I have just run through all of the comments again and I have not found a single up vote on any of John Ellis’ comments. It is now 1:00 pm on the 29th EST.

Olivia Kroth
Guest

That John Ellis does not have many upvotes does not mean he is a bad person. It means he has a different opinion than most readers here. This is socalled ‘plurality’ of opinion, in a democracy everybody is allowed to express his own opinion without being bullied or ostracized.

Olivia Kroth
Guest

No, Bob. It is not fair to block John Ellis. This would be downright censure. The DURAN does not censure. The DURAN is for freedom of speech. Besides, I find some of John’s sayings quite convincing (although not those about President Putin!). He has a philosophical nature. I enjoy reading what he writes, even if I often do not agree.

John Ellis
Guest
John Ellis

DISHONEST
Putin knows that 20% of Israelis are Russian, which is why he allows Russian Israeli F35 fighter-jet pilots to bomb, Syria, Lebanon and Iraq. Surely, Putin giving Syria the S-300 is one big joke.
That is why Putin does nothing to stop Russian Israeli IDF in their slaughter of Gaza.
That is why rich Putin has such a love relationship with rich Russian Israelis.

Smoking Eagle
Guest
Smoking Eagle

“That is why Putin does nothing to stop Russian Israeli IDF in their slaughter of Gaza.”

For heaven’s sake! The whole world is watching what Israel is doing to exterminate Palestinians, and doing nothing to stop the genocide. The U.N. gives Israel a little smack on the hands every now and again but it amounts to nothing.

It is not Russia that is arming Israel, Ukraine, Saudi Arabia, and various terrorist groups but the US, UK, France, and Canada.

You have swallowed the MSM’s/western governments’ anti-Putin, anti-Russia propaganda.

Shear the Sheeple
Guest
Shear the Sheeple

The MSM/western governments never mention Putin/Israeli relations. How could they without condemning Netanyahu? It would confuse the hell out of their readership/constituents.

Smoking Eagle
Guest
Smoking Eagle

That’s true. I really meant swallowing the MSM’s/western governments’ anti-Putin, anti-Russia propaganda in general and not specifically on Putin/Israeli relations. I guess that wasn’t clear.

John Ellis
Guest
John Ellis

Empire Russia, Empire China and Empire USA are ruled by billionaires.

And while they compete for nuke supremacy, a greater share of world markets and maximizing manufacturing, surely, our only salvation from global warming is to move in the reverse direction.

Bruce Smith
Guest
Bruce Smith

Good report fellows, and yes, I too am an avid follower of Tom Lougano. Bright, like yourselves, he knows how to funnel under the crap of MSM, and is usually right! Had an uncle who was a pilot for USAF, later on in the Berlin Airlift, and could never “get” the Cold War. He found them magnificent pilots, and later on with PanAm, flying over Soviet territory, ground crews just as responsible to safety & professionalism as his old buddies from WWII. Too bad he didn’t live to see the breakdown of USSR. Moving ahead, today you have a commenter… Read more »

John Ellis
Guest
John Ellis

Putin dichotomy — A contradiction — Yes, Putin is not part of the Middle-East problem, but most certainly he is also not part of the solution. For Putin does nothing to bring Russians back home from the enigma of Israel. For blood thirsty Lieberman and over 20% of Israelis are Russian, making 20% of IDF troops, F35 fighter-jets pilots and criminal settlers who kill for free land — surely they are Russian. Surely, Russian-Israeli fighter-jet pilots have nothing to fear from the S-300 anti-aircraft systems in Syria. Surely, not until Lebanon has S-400 systems pointed directly at Syria can Putin… Read more »

John Ellis
Guest
John Ellis

TEST — DO YOU KNOW TRUTH?
The rich have the greatest motivation to vote,
the 50% working-poor every motivation not to vote,
and that is why the 25% most wealthy win all elections.
Yes___ No___

John Ellis
Guest
John Ellis

If you say no, than please explain why it is that the public is so stupid
as to allow the 25% most wealthy to hoard 90% of the wealth?

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