New US sanctions will be timed to tank the ruble before Russian elections
Valentin Katasonov, Russian economist, Tsargrad TV:
Our monetary authorities are doing everything possible to ensure that gang of international speculators [American hedge funds] can enter. Because there are no restrictions on cross-border capital flows. And most importantly, not only to come in, but also to exit. And what we are now witnessing is just the beginning of a process of packing suitcases and departure of these investors.
Speculators is a pack of wild dogs, someone collects them in a pack, and directs them. The dog wants to bite off a piece, it acts on instincts and reflexes. But whoever collects these dogs in a pack, has far more sinister goals. I think the goal is the collapse of the ruble, ahead of the upcoming presidential elections. Don't want to go into politics, but somehow it all syncs. I don't rule out that they will specifically time the law on new sanctions...
Any such speculative action is has a dual purpose. Speculators pursue their own selfish interests, but the organizers of this pack of speculators have more serious intentions...
According to Valentin Katasonov, the new sanctions bill is hung up in Washington to give time to foreign investors to pack up and will be timed to exert maximum damage for the upcoming Russian elections. Unfortunately, Russian Central bank established as a tool of foreign colonial control in the 1990's has failed to defend the ruble and the Russian economy and has demonstrated that it serves the interests of the global dollar pyramid rather than the Russian people. While showing encouraging successes in foreign policy, Putin has struggled to free the Russian financial system from the stranglehold of foreign capital. While this key problem is a subject of much discussion among the Russian expert community (the patriots vs. the Western disciples), the disparity between Putin's action on the international arena and dealing with the liberal fifth column experts at home is a testament to the tight grip of Western bankers on Russian economy.
But Putin still has some tricks up his sleeve:
China Development Bank and the Russian Direct Investment Fund (RDIF), a sovereign wealth fund which invests in infrastructure, energy, industry and other sectors, said they would create a joint investment fund worth 68 billion yuan ($10 billion). The money will finance infrastructure and development projects.
VEB, Russia's state development bank, also signed a deal with China Development Bank for a new 15-year loan worth 50 billion rubles ($850 million) to set up a new innovation fund.
RDIF and VEB are subject to U.S. sanctions imposed on Russia over its involvement in the Ukraine conflict. They are barred from raising long term finance in the U.S. VEB is also under sanctions by the European Union.
"Because they are subject to U.S. and EU sanctions, they are cut off from Western capital," said Sean Kane, counsel at Hughes Hubbard and a former deputy Assistant Director for Policy in the Office of Foreign Assets Control (OFAC) in the U.S. Department of the Treasury.
"That was the purpose of these sanctions, to cut these entities off long term financing in the U.S. and EU," added Kane, who was involved in the development and implementation of the Russia sanctions program.
Russia has been keen to attract more investment from China ever since sanctions were imposed in 2014, and oil prices collapsed.
The new investment funds will be set up in Russia and China's own currencies, rather than dollars or euros, putting them way beyond the reach of the U.S. and European sanctions regimes.
Western sanctions against Russia do not apply to China.
RDIF said existing sanctions should not prevent U.S. investors from co-investing or creating funds with RDIF similar to the one established with CDB.
"Russia certainly has vested interest in publicizing these deals. It is very important to President Putin to show that Russia is not cut off the world," Kane said.
"It's also a way to reinforce the message that these sanctions are not working -- because Russia can get financing elsewhere."