iBankCoin
18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
22,266 Blog Posts

Petrol Deficits: Russian Sovereign Wealth Fund to Hit Zero by Next Year

It was a cunning trap laid by nefarious banking powers in the east. I’m sure House Rothschild (shh, they don’t exist) will be more than happy to lend Russia money, in exchange for them declaring war on one of their neighbors.

Apparently, one of Russia’s giant sovereign wealth funds will be depleted by next year, due to the drop in crude coupled with excessive spending.

Russia will exhaust one of its two sovereign funds next year, according to a finance ministry proposal seen by Reuters, having by that point run through $87 billion since the beginning of 2014 to fill holes in the budget left by a slump in oil prices.

Russia will also spend over the next three years about a third of another of its funds on covering the budget shortfall, the proposal showed, even though that fund was originally intended to cover long-term deficits in the pension system.

The finance ministry proposal, which contains recommendations on spending, has been submitted to the government for its consideration but not yet approved.

Russia’s budget deficit has swollen as oil prices fell sharply from 2014 and the West imposed sanctions over the Ukraine crisis. The deficit stood at 4.3 pct of national output in the first half of 2016, up from 2.6 pct last year and against 0.5 pct in 2014.

At current rates of spending, it has been clear for some time that the Reserve Fund – which at the start of 2014 stood at $87 billion – would run out around 2017.

This is just a small taste of what is to come in 2017, should the price of crude remain depressed.

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11 comments

  1. NON Solo

    Fly,

    You expect us to test Brexit lows?

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  2. ottnott

    Not enough in the sovereign wealth funds, too much in the gangsta billionaire funds. Russia’s missing pension money is in high-end property in London, NYC, etc.

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  3. heaterman

    As fryguy alluded to in the previIous post… prepare for WWIII.
    Nothing lifts crude prices like a good ‘ol fashioned shooting war.

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  4. frog

    I don’t know if it will be a war that lifts crude prices or what. But it’s not going to drop back through the floor again. For whatever reason, it wants to trade in a range right now, similar to the S&P, instead of being bullish or bearish.

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  5. heaterman

    So… the “fix” is in.

    AG meets “by chance” with Bill Clinton on his jet…..A few days later, the FBI says they will not seek prosecution of Hildabeast.

    We knew it would turn out this way.

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  6. frog

    Trigger Warning: This comment contains views that are not Right Wing. If such views will singe your ears, please do not read this post.

    The AG didn’t do anything except to accept the decision made by the FBI. She didn’t change anything as a result of that meeting with Bill Clinton, which she should not have had, as she herself admits now.

    I know Right Wingers would like for all Democrats to be found guilty of whatever Fox News chooses to accuse them of, until proven innocent. But that isn’t the way the law works in the U.S. People are innocent until proven guilty– even if they are Democrats.

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    • helicopter ben
      helicopter ben

      That comment isn’t left or right biased, it shows ignorance in how politics works, especially in Washington.

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    • moneybagz

      How many times do the Clintons get to lie to us ? At some point the standard innocent before proven guilty need not apply when you are a habitual liar.

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  7. mx2101

    Russia could join the European Union !
    Problem solved.
    🙂

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  8. traderconfessions
    traderconfessions

    That Putin is a funny little man.

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  9. chuck bennett

    @frog

    Come on. Tell me how old you are

    What’s the big deal?

    Regards

    Chuck Bennett

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