Forced Russian Default = Economic Calamity

The West is cheering the recent forced Russian Default but can’t seem to realize the repercussions.

For the last several years we’ve written about how the world is facing a sovereign debt crisis.

https://www.financialsmatter.com/?s=sovereign+debt

And how it:

1. Begins in the Emerging Markets
2. Spreads to Europe
3. Eventually ends up in the USA

Cue up:  How politicians in the West have cheered the sanctions that forced Russia into a default (the first since 1918).

These morons haven’t figured out how stopping Russia from borrowing has released a time bomb.

And that the Western world will be punished as a result.

Why?

Forcing Russia into default has effectively relieved it from its debt service.

As a result, Western institutions will be the big losers because most of them own Russian debt in their pensions.

And they bought Russian debt because it paid more than the rates in Europe.

Why Forced Russian Default Hurts

So, this will create more of a financial crisis in the West.

In turn these institutions will demand their respective governments to compensate them for causing the default in the first place.

It’s a vicious circle.

And gets more vicious when you consider how the Federal Reserve (FED) is pushing rates higher because they’re being blamed for inflation.

Ironically (or NOT) these policies will fail.

And in the process create more inflation while spurring more Emerging Market Sovereign debt.

BTW, if your 401K seems to be going down more than the market, it might be because the Boyz managing it bought Russian and Emerging market debt.

So, if you find that to be true you need to do what we’ve been saying for quite some time.

GET OUT OF BONDS…ESPECIALLY GOVERNMENT BONDS.

Is that clear enough?

The net result will be a continuation of what we’ve been calling the Most Hated Bull Market in History.

Why?

Because many big name brand stocks are paying dividends higher than most bonds.

And the likelihood for recovery is far greater than the bond market.

Learn what sectors of the market will benefit most from the imminent collapse in bonds in our July issue of “…In Plain English” (HERE).

Share this with a friend…especially if they’re clueless about bonds.

They’ll thank YOU later.

At Financial$Matter We’re Not Just About Finance.

We simply use finance to give you hope.

https://www.financialsmatter.com/category/in-plain-english/

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