Well they went and did it now.
This is a bold move, and one that is sure to escalate things quickly. Think about how much has been put at stake trying to lift Russia out of the pit of communism, over the past two decades. Think of Goldman Sachs’ Blankfein making cross continental trips all through the ’90′s, setting up access for foreign investment into Russia’s economy.
The move is crazy, of course. If Russia started hard confiscation of assets, you’re looking at a basic replay of what happened when they defaulted on their bonds in ’98. Economic stagnation, a plunge back into hard poverty, and all. Worse, even.
The trouble is, the Russian’s are just crazy enough not to care. The ’98 default itself didn’t make any sense. It was a clear blunder – to everyone – that would only hurt Russia and those who were trying to help support the country.
And they did it anyway. And the whole time, Russia’s “leadership” looked on with straight backs and the visage of complete confidence.
Threatening to confiscate assets to get your way is a lot like threatening to shoot yourself in the face. Sure it splatters the audience in blood and inconveniences them…but you’re the one that’s dead, idiot. Yet, here we are, watching “new” Russia follow in the footsteps of “old” Russia – plus Argentina and Venezuela – and you can’t help but wonder, do the people clutching the capacity to throw this switch know something that we don’t?
Like that keeping Russia-at-large somewhere just between the stone age (fighting polar bears with empty vodka bottles) and Flint, MI is personally the best outcome for them?
There’s a small part of me that’s tempted to jump around and start hunting for deals; scouting around for people willing to take $0.50 on the dollar for their now very much imperiled Russian stakes. But that small part is quickly squelched by the much larger part of me that wants nothing to do with gangster thugs running a cross between a cult and a crime syndicate.