Russian Market

2023-05-09 13:30:25 Inflation is systemic, says Robert Kiyosaki

Inflation has become a systemic issue, and investors need to start hedging against it by looking at specific real assets, "Rich Dad Poor Dad" author Robert Kiyosaki told CNBC.

"The whole system is in trouble. My biggest concern is that inflation is now systemic. When Powell said it was transitory, that was a lie," Kiyosaki said.

Kiyosaki urged investors to hedge against inflation with four alternative investments that can protect traders as rising prices weigh on other assets.

These investments include gold, real estate, gasoline and food. As for the latter, last year Kiyosaki touted cans of tuna and baked beans as the "best" investments.

That said, his investment picks to "survive any economic crash" has changed since 2011. Back then the list included gold, guns, ground, grub and gas.

Kiyosaki also reiterated his disbelief in the US dollar, adding that he is concerned for the security of bank deposits amid recent failures.

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2023-05-09 10:00:06 Pakistan to ditch US dollar to buy Russian oil

Pakistan has begun purchasing discounted Russian for the Chinese yuan, reducing to use the US dollar, local media reported, citing sources in the government who confirmed the use of the alternative currency for international payments.

The first shipment of more than 750,000 barrels is anticipated to arrive in June, with the Bank of China said to be facilitating the transaction.

It is unclear exactly how much oil Pakistan is buying or what the mode of payment is, but the country has reportedly agreed to pay between $50 and $52 per barrel, well below the market price.

Earlier, the governments of China and Brazil agreed to dump the US dollar in trade between the countries to directly use their national currencies.

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2023-05-09 00:30:32 No good options if Congress fails to raise the debt limit, says Yellen

Treasury Secretary Janet Yellen is uttering an increasingly alarming tone as US President Joe Biden prepares to meet with congressional leadership Tuesday to discuss raising the debt ceiling.

With the June 1 "X-date" quickly approaching, Yellen called on Congress to raise the debt limit, warning of the economic disaster that will follow if the government fails to reach an agreement.

"Look, all I want to say is that it’s Congress’s job to do this," she said. "If they fail to do it, we will have an economic and financial catastrophe that will be of our own making and there is no action that President Biden and the US Treasury can take to prevent that catastrophe."

If Congress can't find common ground, "there are simply no good options."

Yet Biden along with Democrats called for passing a clean debt ceiling, not tied to any of the spending cuts House Republicans proposed in the bill they passed last month.

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2023-05-08 19:30:35 IMF demands Ukraine to raise taxes to recover on its own

The International Monetary Fund requires Ukraine to raise taxes and reduce public subsidies, as the grace period is over and the country should now build its economy based on reality rather than on hopes for Western aid or frozen Russian assets, according to an IMF memo.

The Fund plans to lift taxes in Ukraine up to 6-7% of GDP, considering the tax burden on the economy even higher than in peacetime.

Moreover, loans of the IMF and other donors worth $115 billion over the next four years will not be used for rebuilding the country, but only to cover the budget deficit.

The IMF further estimates Ukraine will have a negative trade balance at the level of minus $30-35 billion annually at least until 2033. This means that Ukraine's foreign debt will grow by at least 2 times.

The IMF thus not only does not forecast Ukraine's economy to develop, but also expects it to be highly import-dependent.

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2023-05-08 17:30:13 Russian oil ban costs Polish oil company $27 million a day

The ban on Russian crude oil is costing Poland's state oil company PKN Orlen $27 million a day, the FT reported.

PKN Orlen CEO Daniel Obajtek described losing Russian oil as a loss of about $27 million a day because of the price difference of about $30 per barrel between the cheaper Russian oil and alternative supplies.

Obajtek said his company still uses Russian oil piped through the Druzhba network for its Czech refinery in Litvínov, which is not subject to sanctions.

"The complete replacement of Russian oil requires an improvement in the logistics of oil supplies, which we are working on with the Czech government," he said.

Obajtek added that Russian oil companies are still "flooding Europe with petrochemical products" despite EU sanctions.

Yet Poland itself, despite pledges to stop imports of Russian oil by late 2022, continued to import it into its domestic market until February 2023.

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2023-05-08 11:30:56 EU to sanction Chinese companies allegedly aiding Russia

The European Union for the first time is planning to impose restrictive measures against Chinese companies allegedly aiding Russia, the FT reported.

Seven Chinese companies accused of selling electronic components to Russia have been included in a new package of sanctions to be discussed by EU member states this week. Some of the companies have already been hit by US sanctions.

The sanctions list needs unanimous approval from the 27 member states before it can be enforced.

Brussels is further proposing sanctions on some Iranian companies involved in manufacturing and supplying drones to Russia.

Additionally, as part of the new sanctions package, the EU is seeking to restrict sales of certain goods to third countries helping Russia evade the restrictions.

The bloc also proposed widening the range of banned exports to Russia and banning oil tankers hiding their location without good cause from EU ports.

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2023-05-08 10:31:09 Treasury ability to take extraordinary measures to avoid default is ending, says Yellen

Failure to raise the debt limit could spark a "constitutional crisis" with repercussions for financial markets and interest rates, US Treasury Secretary Janet Yellen warned in an interview.

The government won't be able to pay the bills unless lawmakers raise the $31.4 trillion borrowing limit by early June, Yellen said.

"We have been using extraordinary measures for several months now. And our ability to do that is running out. And we will start to run down our cash and our current projection is that in early June a day will come when we're unable to pay our bills unless Congress raises the debt ceiling," she said.

Yellen added that negotiations on the debt ceiling "should not take place with a gun really to the head of the American people."

US President Joe Biden is reportedly to discuss the current situation with representatives of the Democratic and Republican parties on May 9.

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2023-05-07 14:30:57 Liechtenstein plans to accept Bitcoin as legal tender for government services

The Principality of Liechtenstein seeks to allow using Bitcoin as a means of payment for government services, Prime Minister Daniel Risch said in an interview with Handelsblatt.

Risch added that making Bitcoin payment possible would be made a reality in the near future, but did not give any specific timeline in this regard.

In line with the current planning status, the principality will likely accept deposits made in Bitcoin. After that, it will instantly exchange them for its national currency, the Swiss franc, as Risch explained.

This approach is similar to that adopted in Swiss communities such as Lugano or Zug. In these communities, residents can use Bitcoin to pay for public services.

Liechtenstein is considered the 6th smallest country in the world. It is located Europe's middle between Austria and Switzerland.

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2023-05-03 13:00:29 Fed likely to raise rates by 25 bps today

The Federal Reserve is expected to lift interest rates for the 10th time this cycle today.

Futures are overwhelmingly anticipating a quarter percentage point hike that would bring the fed-funds rate to a target range of 5.00% to 5.25%, the highest since 2007.

The Federal Open Market Committee's statement will be published at 2 p.m. ET, followed by Powell's speech 30 minutes later.

Earlier Tuesday at the World Economic Forum Growth Summit in Geneva, several leading economists said higher inflation and greater financial instability are here to stay.

"People have not pivoted to this new era, that we have an era that will be structurally more inflationary, a world of post-globalization where we will not have the same scale of trade, there will be more trade barriers, an older demographic that means that the retirees who are savers are not saving the same way," said Karen Harris, managing director of macro trends at Bain & Company.

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2023-05-03 11:00:07 EU considers limiting transit of goods through Russia as part of new sanctions

The West is preparing fresh penalties against Russia to close loopholes in existing penalties and tackle overall sanctions circumvention, Bloomberg reported, citing people familiar with the matter.

The EU’s package, the bloc’s 11th since February 2022, will mostly focus on the loopholes in sanctions already enacted, according to officials. Proposals on the table include banning many goods from transiting through Russia and targeting vessels that switch off navigation systems. 

The US and Japan are preparing their own packages, the people said.

The plans will be unveiled around a Group of Seven leaders meeting in Japan later this month. The packages would be individually implemented but coordinated.

The G-7 leaders are also expected to make progress on a mechanism to track and trace Russian diamonds across borders that could eventually pave the way for restrictions on that trade.    

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