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Furious Russia, Downgraded To Just Above Junk By S&P, Proposes "Scorched Earth"

That's funny aren't they a lendor to the United States - so our creditors credit rating just got trashed? So what happens to ours?
 
DA60 said:
Furious Russia, Downgraded To Just Above Junk By S&P, Proposes "Scorched Earth" Retaliation Against NATO Countries | Zero Hedge
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Sure they are furious. But they must have known that the war they are into is between the assets they sell and one of their best customers, while their banking connections are falling under sanctions, that could stop payments. I wouldn't lend them money right now. On the other hand, if full fledged war breaks out with the EU.... 'won't happen, of course, but in 1913 there were an awful lot of statements around Europe that war could not happen too. And we are already in '14.
 
It would be nice if we could stop the pointless dick measuring contests with every asshole country in the world.
 
CalGun said:
That's funny aren't they a lendor to the United States - so our creditors credit rating just got trashed? So what happens to ours?
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A very small one, yes. They hold but a fraction of the treasuries in circulation. Seeing as their economy is heavily dependent on foreign capital, a trade war would certainly not benefit them. Our credit worthiness won't be adversely affected in the least.
 
CalGun said:
That's funny aren't they a lendor to the United States - so our creditors credit rating just got trashed? So what happens to ours?
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Thew USA manipulates metals, currencies, credit ratings with our huge US Dollar base. It shouldn't be worth a crap, because of the debt realities and obligations, but so many Nations around the World hold so much US currency that they feel compelled to support it just so they also don't sustain major losses. A genuine currency trap. Like a hot potato and everyone makes sure they don't heat up the potato. That is the threeat right now. Russia will be forced to attack our currency and if China chooses to help with its trillions in surplus and a large portion in US Dollars, we will be in trouble. Otherwise, business as usual, with the Big Corporatist Banks scalping the World.
 
http://www.bbc.com/news/business-27159423

Credit ratings agency Standard & Poor's has cut Russia's rating to one notch above "junk" status.

The move comes as foreign investors continue to take money out of the country amid tensions over the situation in Ukraine.

S&P downgraded Russia's rating to 'BBB-' from 'BBB'.

Also on Friday, Russia's central bank raised its key interest rate from 7% to 7.5% as it sought to defend the value of the ruble.

Capital flight

Announcing the downgrade, S&P said: "In our view, the tense geopolitical situation between Russia and Ukraine could see additional significant outflows of both foreign and domestic capital from the Russian economy."

The agency said this could "further undermine already weakening growth prospects".

It warned that further downgrades were possible if the West imposed tighter sanctions against Moscow.

Investors have been pulling money out of Russia since last year when the country's economy ran into trouble, but this process has intensified in recent weeks amid concerns over Ukraine.

In the first three months of this year, foreign investors have withdrawn $63.7bn (£37bn) from Russia, and economic growth has slowed significantly - it is expected to grow at no more than 0.5% during 2014.

Russian shares, which have traded lower this week, fell further following the downgrade, with the MICEX stock index slipping over 1.6% at one stage.

Russia's central bank said its rate rise was because of a higher inflation risk and the weakness of the ruble. The Russian currency has lost nearly 8% against the dollar this year.

The bank said its move would enable it to lower inflation to 6% by the end of 2014 and added it did not plan on cutting rates in coming months.

Russia's Economy Minister Alexei Ulyukayev dismissed S&P's move, saying that "partially, it is kind of a politically motivated decision".

However, analysts said other credit rating agencies were likely to follow suit.

"Russia is going backwards as reflected by developments in relations with Ukraine and the West," said Timothy Ash, analyst at Standard Bank.

He said the move was "bad for investment, bad for capital flows, and bad for broader political, economic reform and institutional reform".
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DaveFagan said:
Thew USA manipulates metals, currencies, credit ratings with our huge US Dollar base. It shouldn't be worth a crap, because of the debt realities and obligations, but so many Nations around the World hold so much US currency that they feel compelled to support it just so they also don't sustain major losses. A genuine currency trap. Like a hot potato and everyone makes sure they don't heat up the potato. That is the threeat right now. Russia will be forced to attack our currency and if China chooses to help with its trillions in surplus and a large portion in US Dollars, we will be in trouble. Otherwise, business as usual, with the Big Corporatist Banks scalping the World.
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There is no chance of that happening, the U.S. dollar has value, and a large majority of the debt of the U.S. is held by the U.S. itself or it's citizens. Russia needs to learn that if they mess with other countries, they are going to get their economy destroyed, again.
 
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