Similarities between Belarus and Greece?
As thetrader wrote about a couple of days ago, Belarus, decided to devaluate it’s currency overnight by almost 40%. (24th May we wrote”As we have argued, Greece need to take the big STOP, maybe even follow Belarus move last night and devaluate, but that on the other hand means leaving Euro…). This hasn’t been reported of, because the world is focusing on other things at the moment, such as Obama’s great great grandfather’s origin from Ireland etc.
Belarus is headed for an economic “meltdown” and the ruble will need to depreciate another 51 percent, VTB Capital said, as locals lay siege to shops and protest price increases after the central bank devalued the currency.
The Belarusian central bank let the managed ruble weaken by 36 percent versus the dollar on May 24 as demand for dollars and euros from importers and households threatened to derail an economy already laboring under a current-account deficit equal to 16 percent of gross domestic product.
This sounds familiar, just change Russia for IMF/Eurozone and voila it is the same situation in Europe. Greece is a relatively small economy, but still larger than Belarus. Russia and other former Soviet partners last week agreed to give Belarus a $3 billion loan and urged President Aleksandr Lukashenko’s government to sell $7.5 billion of assets to replenish the state’s coffers.
“A ‘91-style meltdown is almost inevitable,’’ said Alexei Moiseev, chief economist at VTB Capital, the investment-banking arm of Russia’s second-largest lender, referring to the country’s economic slump after the collapse of the Soviet Union.
Ah, yes, we have heard a lot about the Greek privatization plans this week. ‘‘Rapid privatization is the only way that can help avert complete disaster.”
Somewhat this also applies to Greece, we need more loans, in order to not default. “The whole world tells them, guys, you have economic problems, you should do something, and all they did was live off getting more and more loans.”
And finally, the famous fire sale Eurozone wants Greece to finally enter, so the Archipelago and Parthenon can be picked up at low prices. Greece (forced) to sell crown jewels
Russian media are creating a “flurry” of speculation about the nation’s asset sales so they can “make good at our expense,” Lukashenko said today in Astana, the capital of Kazakhstan, according to comments reported by state news agency Belta. “But we will not throw anything to anybody for nothing.”
Somewhat this reminds us of the Greek situation. Welcome to capitalism.